A-LevelAccountingAdjustments to Financial StatementsMay/June 2014Paper 1 Q21 Mark
When preparing a sole trader's annual accounts, no adjustment was made for a prepayment at the end of the year. What is the effect of this omission? A current assets overstated, owner's capital overstated B current assets understated, owner's capital understated C profit for the year overstated, trade payables understated D profit for the year understated, trade payables understated
Acurrent assets overstated, owner's capital overstated
Bcurrent assets understated, owner's capital understated
Cprofit for the year overstated, trade payables understated
Dprofit for the year understated, trade payables understated
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of adjustments to financial statements 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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