A-LevelAccountingAnalysis and Interpretation of Financial StatementsOct/Nov 2010Paper 1 Q221 Mark

A company's gross profit ratio for the year ended 31 December 2008 was 25%. This increases to 28% for the year ended 31 December 2009. What could have been responsible for the increase?

Q: What topic does this question test?

This question tests Analysis and Interpretation of Financial Statements in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Aan increase in the cost of purchases during 2009

Ban increase in the volume of sales during 2009

Can over-valuation of inventory (stock) as at 31 December 2009

Dan under-valuation of inventory (stock) as at 31 December 2009

✓ Correct Answer

The correct answer is C: an over-valuation of inventory (stock) as at 31 December 2009

📋 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 Analysis and Interpretation of Financial Statements in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting Oct/Nov 2010 examination, Paper 1 Variant 2.

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