A-LevelAccountingAccruals and PrepaymentsOct/Nov 2010Paper 1 Q11 Mark
On 1 January 2009 a business had prepaid rent of $50. During 2009, three rent payments were made of $250 each. On 31 December 2009, the business still owes $200 rent on account for 2009. The business owner has charged the rent payments made during 2009 in his income (profit and loss) account. What is the effect on net profit?
A$200 too high
B$200 too low
C$250 too high
D$250 too low
✓ Correct Answer
The correct answer is C. 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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