A-LevelAccountingCapital and Revenue ExpenditureOct/Nov 2016Paper 1 Q81 Mark
An item of capital expenditure has been incorrectly treated as revenue expenditure in the financial statements of a business. What is the effect of this error on the financial statements of the business? assets profit A overstated overstated B overstated understated C understated overstated D understated understated
Aoverstated overstated
Boverstated understated
Cunderstated overstated
Dunderstated understated
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of capital and revenue expenditure 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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