A-LevelAccountingAnalysis and InterpretationOct/Nov 2014Paper 1 Q211 Mark
Analysis of a business's financial statements shows the following. net profit ratio (%) inventory turnover (days) 2011 21 62 2012 23 58 2013 26 53 Revenue has stayed the same over the three years. Which statement is correct?
AProfitability is decreasing and inventory is decreasing.
BProfitability is decreasing and inventory is increasing.
CProfitability is increasing and inventory is decreasing.
DProfitability is increasing and inventory is increasing.
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of analysis and interpretation 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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