Accounting 0452 · IGCSE · Correction of errors

Correction of errors — practice question

Following the completion of Abdul’s draft financial statements, two mistakes were identified. • The bank transfer used to buy a machine, $5000, had been left out of the accounts. • The motor vehicle purchase, $15 000, was posted to the motor vehicle repair account. What impact will the correction of these mistakes have on the non-current assets and the working capital?

  • ANon-current assets increase \$15000; Working capital decrease \$5000
  • BNon-current assets increase \$15000; Working capital no effect
  • CNon-current assets increase \$20000; Working capital decrease \$5000
  • DNon-current assets increase \$20000; Working capital no effect

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