A-LevelAccountingInterpretation of Financial StatementsMay/June 2012Paper 1 Q171 Mark

A business finds that it is unable to pay its trade payables because of a poor cash flow. What should it do to improve its cash flow?

Q: What is the correct answer to this A-Level Accounting question?

The correct answer is A: factor its trade receivables.

Q: What topic does this question test?

This question tests Interpretation of Financial Statements in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Afactor its trade receivables

Bincrease its trade receivables

Cincrease its inventory

Drepay its overdraft

✓ Correct Answer

The correct answer is A: factor its trade receivables

📋 Examiner Report & Trap Analysis

Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...

🎯 Mark Scheme Breakdown

Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.

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About This A-Level Accounting Question

Topic

This multiple-choice question tests Interpretation of Financial Statements in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting May/June 2012 examination, Paper 1 Variant 2.

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