A-LevelAccountingPreparation of financial statements9706/12 · May/June 2011 · Q121 Mark

Which transaction would increase the current assets of a business?

Apaying invoices $950, after receiving $50 cash discount

Bpurchasing a machine on credit for $1200

Cpurchasing inventory for $1100 cash and selling it on credit for $1500

Dselling inventory with an original cost of $800 at below cost price

✓ Correct answer

C: purchasing inventory for $1100 cash and selling it on credit for $1500

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2011 Paper 1 Variant 2, question 12.

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