A-LevelAccountingAdjustments and Accruals/PrepaymentsMay/June 2013Paper 1 Q21 Mark
A business paid $5750 during its trading year for advertising. Part of this amount included $500 in respect of the next financial year. Which effects would the correct treatment of the $500 have on the financial statements?
Aprofit for the year decrease, net current assets decrease
Bprofit for the year decrease, net current assets increase
Cprofit for the year increase, net current assets decrease
Dprofit for the year increase, net current assets increase
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of adjustments and accruals/prepayments within the Accountingsyllabus. The examiner's mark scheme requires...
📋 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...
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