O-LevelAccountingPreparation of financial statements7707/11 · Oct/Nov 2011 · Q171 Mark

Tracey runs a clothing store. She sold a computer with a net book value of $2000 for $1800. Cash was received but no entries had been made in any accounts. What is the effect on the balance sheet if this error is corrected?

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Anon-current assets: decrease $1800, current assets: increase $1800

Bnon-current assets: decrease $1800, current assets: increase $2000

Cnon-current assets: decrease $2000, current assets: increase $1800

Dnon-current assets: decrease $2000, current assets: increase $2000

✓ Correct answer

C: non-current assets: decrease $2000, current assets: increase $1800

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Topic: Preparation of financial statements, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2011 Paper 1 Variant 1, question 17.

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Tracey runs a clothing store. She sold a computer with a net book value of $2000 for $1800. Cash was received but no entries had been made in any accounts. What is the effect on the balance sheet if this error is corrected?

✓ Correct answer

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