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O-LevelAccountingVerification of accounting records7707/11 · May/June 2011 · Q131 Mark

Motor repairs of $250 have been posted in error to the motor vehicles account. What is the effect on the financial statements?

Aprofit for the year: overstated; non-current assets: overstated
Bprofit for the year: overstated; non-current assets: understated
Cprofit for the year: understated; non-current assets: overstated
Dprofit for the year: understated; non-current assets: understated

✓ Correct answer

A: profit for the year: overstated; non-current assets: overstated

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About this question

Topic
Verification of accounting records, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source
O-Level Accounting, May/June 2011 Paper 1 Variant 1, question 13.

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