Accounting Multiple Choice Question – 24 December 2019

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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