A-LevelAccountingAccruals and PrepaymentsMay/June 2025Paper 1 Q141 Mark

A business paid $5750 during its trading year for advertising. This amount included $500 in respect of the next financial year. How would the correct treatment of the $500 affect the financial statements?

Q: What topic does this question test?

This question tests Accruals and Prepayments in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Aprofit for the year: decrease, net current assets: decrease

Bprofit for the year: decrease, net current assets: increase

Cprofit for the year: increase, net current assets: decrease

Dprofit for the year: increase, net current assets: increase

✓ Correct Answer

The correct answer is D: profit for the year: increase, net current assets: increase

📋 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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About This A-Level Accounting Question

Topic

This multiple-choice question tests Accruals and Prepayments in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting May/June 2025 examination, Paper 1 Variant 2.

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