Day: October 27, 2020

A business’s Income Statement for 2019 showed insurance as £8,000. On 1 January insurance owing was £1,600.

On 31 December 2019 insurance paid in advance was £1,200.

What was the actual amount paid for insurance through the bank account for the year ended 31 December 2019?

Select ONE answer:

1. £7,600
2. £8,000
3. £8,400
4. £10,800

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Reversal of 2018 accrual is £1,600 + Income Statement of £8,000 + end of year prepayment of £1,200

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