O-LevelAccountingVerification of accounting records7707/11 · May/June 2022 · Q101 Mark
After the preparation of Abdul's draft financial statements, two errors were discovered. The purchase of a machine by bank transfer, $5000, was omitted from the accounts. The purchase of a motor vehicle, $15000, was entered in the motor vehicle repair account. What effect will correcting these errors have on the non-current assets and the working capital? non-current assets working capital
Anon-current assets: increase 15000, working capital: decrease 5000
Bnon-current assets: increase 15000, working capital: no effect
Cnon-current assets: increase 20 000, working capital: decrease 5000
Dnon-current assets: increase 20 000, working capital: no effect
✓ Correct answer
C: non-current assets: increase 20 000, working capital: decrease 5000
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