Day: December 25, 2019

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

At the start of the year there was an accrual in respect of rent of £2,500 and a prepayment in respect of rates of £3,000.

At the end of the year there was rent due of £4,500 and rates prepaid of £3,500. The total expense for both rent and rates for the year was £36,000.

The total amount paid during the year. in respect of both rent and rates, was:

Select ONE answer:

1. £34,500
2. £35,500
3. £36,500
4. £37,500

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 1

1. Correct
   Rent & Rates Expense
   Dr Balance b/d (Rates prepaid) £3,000
   Dr Bank £34,500
   Dr Balance c/d (Rent due) £4,500
   Cr Balance b/d (Rent accrued) £2,500
   Cr Profit & Loss (Expense for the year) £36,000
   Cr Balance c/d (Rates prepaid) £3,500
   Totals £42,000
2. Not correct
3. Not correct
4. Not correct

 

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