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?
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. 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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