A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2010 · Q91 Mark

An electricity accrual of $375 was treated as a prepayment in preparing a trader's income (profit and loss) account. What was the effect on profit?

Aoverstated by $375

Boverstated by $750

Cunderstated by $375

Dunderstated by $750

✓ Correct answer

B: overstated by $750

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2010 Paper 1 Variant 2, question 9.

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