A-LevelAccountingAccruals and PrepaymentsMay/June 2023Paper 1 Q121 Mark
A business receives rent from letting part of its premises. On 1 January 2022, there was a balance brought forward of $1000 in the rent receivable account in respect of one month's rent received in advance. During the year ended 31 December 2022, the business received further amounts totalling $13000 to cover the period from 1 February 2022 to 31 January 2023. A rent increase of 10% was introduced from 1 April 2022. The statement of profit or loss for the year ended 31 December 2022 incorrectly included an amount of $13000 for rent receivable. What was the effect of this error on the profit for the year?
A$100 overstated
B$100 understated
C$1100 overstated
D$1100 understated
✓ Correct Answer
The correct answer is A. This question tests the candidate's understanding of accruals and 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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