A-LevelAccountingPreparation of financial statements9706/12 · May/June 2023 · Q131 Mark

A sole trader's personal expenses had been paid out of the business bank account and included in the statement of profit or loss. What was the effect of this on the profit for the year and on capital?

Ano effect no effect

Bno effect overstated

Cunderstated no effect

Dunderstated understated

✓ Correct answer

C: understated no effect

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2023 Paper 1 Variant 2, question 13.

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