Accounting Multiple Choice Question – 24 December 2019

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

Accounting

A firm records all transactions relating to the expense for both rent and rates in a single ledger account.

On 1 January there was an accrual of £900 in respect of rent and a prepayment of £600 in respect of rates.

On 31 December there was a rent accrual of £1,100 and rates prepaid of £700.

During the year, £4,800 was paid in respect of rent and £3,100 in respect of rates.

The total expense for both rent and rates for the year is:

Select ONE answer:

  1. £7,800
  2. £8,000
  3. £8,100
  4. £8,200

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 2

  1. Not correct
  2. Correct
    Rent & Rates Expense
    Dr Balance b/d (Rates prepaid) £600
    Dr Bank (Rent paid) £4,800
    Dr Bank (Rates paid) £3,100
    Dr Balance c/d (Rent accrued) £1,100
    Cr Balance b/d (Rent accrued) £900
    Cr Profit and Loss £8,000
    Cr Balance c/d (Rates prepaid) £700
    Totals £9,600
  3. Not correct
  4. Not correct

 

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Author: stuart001uk2014

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

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