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?

Q: What topic does this question test?

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

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: Profitability is increasing and inventory is decreasing.

📋 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 in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting Oct/Nov 2014 examination, Paper 1 Variant 2.

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