Accounting Multiple Choice Question – 2 June 2023

When preparing a sole trader’s annual accounts, no adjustments were made for prepayments at the end of the year.

What is the effect of these omissions?

Select ONE answer:

1. net profit overstated & creditors understated
2. net profit understated & creditors understated
3. current assets overstated & owner’s capital overstated
4. current assets understated & owner’s capital understated

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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