O-LevelAccountingVerification of accounting records7707/11 · May/June 2024 · Q81 Mark

Trevor prepared his financial statements for the year ended 31 December 2020. He then discovered that he had omitted to record a cash payment, $240, for insurance for the 12 months ending 30 November 2021. What was the effect of this error on his statement of financial position?

A$240 overstated $20 understated $220 overstated

B$240 overstated $220 understated $20 overstated

C$240 understated $20 overstated $220 understated

D$240 understated $220 overstated $20 understated

✓ Correct answer

B: $240 overstated $220 understated $20 overstated

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Topic: Verification of accounting records, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2024 Paper 1 Variant 1, question 8.

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Trevor prepared his financial statements for the year ended 31 December 2020. He then discovered that he had omitted to record a cash payment, $240, for insurance for the 12 months ending 30 November 2021. What was the effect of this error on his statement of financial position?

✓ Correct answer

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