Accounting Multiple Choice Question – 23 December 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting

If rent receivable has been prepaid to the extent of £75 at the end of a firm’s first financial year, the amount of rental income shown in its profit and loss account, relative to the amount of rent it received during the year, will be . . .

Select ONE answer:

  1. the same.
  2. £75 more.
  3. £75 less.
  4. None of the above.

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 3

  1. Not correct
  2. Not correct
  3. Correct
    For example, if the rent receivable applicable to the year is £100 and £175 has been received, then, in accordance with the accruals concept, the amount to be shown in the profit and loss account is £100, £75 less than the amount received. This would be shown as follows:
    Rent Receivable Income (B/S)
    Dr Profit and Loss £100
    Dr Balance c/d £75
    Cr Bank £175
    Totals £175
  4. Not correct

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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