A-LevelAccountingDepreciation and Non-Current AssetsMay/June 2023Paper 1 Q41 Mark
The financial year of a business ends on 31 December. At the beginning of the financial year, the following payments were made in respect of a new machine. $ purchase cost 60000 installation cost 10000 It was discovered that the installation cost had been incorrectly treated as an expense. It is the policy of the business to depreciate machinery at 20% per annum using the straight-line method. What was the effect of this error on the profit for the year ended 31 December?
A$8000 overstated
B$8000 understated
C$12000 overstated
D$12000 understated
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of depreciation and non-current assets 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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