O-LevelAccountingAccounting principles and policies7707/11 · May/June 2010 · Q141 Mark

Repairs to a motor vehicle were debited in error to the motor vehicles account. How does this affect the profit for the year (net profit) and the non-current (fixed) assets in the balance sheet?

Aprofit for the year (net profit) overstated non-current (fixed) assets overstated

Bprofit for the year (net profit) overstated non-current (fixed) assets understated

Cprofit for the year (net profit) understated non-current (fixed) assets overstated

Dprofit for the year (net profit) understated non-current (fixed) assets understated

✓ Correct answer

A: profit for the year (net profit) overstated non-current (fixed) assets overstated

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Topic: Accounting principles and policies, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2010 Paper 1 Variant 1, question 14.

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Repairs to a motor vehicle were debited in error to the motor vehicles account. How does this affect the profit for the year (net profit) and the non-current (fixed) assets in the balance sheet?

✓ Correct answer

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