A-LevelAccountingAnalysis and Interpretation of Financial StatementsMay/June 2021Paper 1 Q181 Mark
The trade receivables turnover ratio figures for two companies are shown. company turnover in days X 45 Y 55 What does this indicate about company Y?
AIt has higher levels of trade receivables than X.
BIt has higher liquidity than X.
CIt is less efficient in managing its receivables than X.
DIt offers less credit to its customers than X.
✓ Correct Answer
The correct answer is C: It is less efficient in managing its receivables than X.
📋 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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