O-LevelAccountingPreparation of financial statements7707/11 · Oct/Nov 2013 · Q231 Mark

At the end of the financial year, a trader is owed commission. How will this be treated in the trader's financial statements?

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Aincome statement increase expenses, balance sheet increase assets

Bincome statement increase expenses, balance sheet increase liabilities

Cincome statement increase income, balance sheet increase assets

Dincome statement increase income, balance sheet increase liabilities

✓ Correct answer

C: income statement increase income, balance sheet increase assets

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Topic: Preparation of financial statements, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2013 Paper 1 Variant 1, question 23.

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At the end of the financial year, a trader is owed commission. How will this be treated in the trader's financial statements?

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