A-LevelAccountingCompanies AccountsOct/Nov 2014Paper 1 Q221 Mark

X Limited and Y Limited both started trading on 1 January 2001. Each year, both businesses had a profit from operations of $20000. On 31 December 2013 retained earnings were as follows: $ X Limited 145000 Y Limited 95000 Which statement explains the difference?

Q: What topic does this question test?

This question tests Companies Accounts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

AX Limited has transferred higher amounts to general reserve.

BX Limited pays a higher dividend per share.

CY Limited has fewer shares in issue.

DY Limited has a higher level of debt.

✓ Correct Answer

The correct answer is D: Y Limited has a higher level of debt.

📋 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 Companies Accounts 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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