O-LevelAccountingAnalysis and interpretation7707/12 · May/June 2020 · Q21 Mark

How does a trader use the information provided by financial statements?

Ato calculate the amount of cash drawings taken

Bto calculate the amount that is owed by trade receivables

Cto check the balance shown on a bank statement

Dto compare the business performance over a number of years

✓ Correct answer

D: to compare the business performance over a number of years

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2020 Paper 1 Variant 2, question 2.

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