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Other Adjustments for Final Accounts

Authored by Dean Hoss

Business, Social Studies, Other

9th Grade - Professional Development

Used 73+ times

Other Adjustments for Final Accounts
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17 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the balance sheet of a sole trader, accruals should be shown as part of . . .

fixed assets.

drawings.

current assets.

current liabilities.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the balance sheet of a sole trader, prepayments should be shown as . . .

a deduction from capital.

part of creditors.

a deduction from current liabilities.

part of current assets.

3.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

In the case of a firm which rents the premises from which it operates, a credit balance brought down on its rent payable account at a particular date, means that, at that date, . . .

the firm owes rent.

the firm has paid rent in advance.

the firm has paid too much rent.

the firm has paid too little rent.

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Expenses relevant to an accounting period which remain unpaid at the end of the period should . . .

be shown as an expense in the profit and loss account for the period and shown as a current liability in the balance sheet at the end of the period.

be shown as an asset in the balance sheet at the end of the period and shown as income in the profit and loss account for the period.

be shown as part of long-term liabilities in the balance sheet at the end of the period.

be netted off against prepayments at the same date and shown together, as a single figure, in the balance sheet at the end of the period.

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The effect of the year-end adjustment required in respect of rates prepaid is . . .

to decrease the figures shown in the balance sheet for both creditors and prepayments.

to decrease both the rates expense shown in the profit and loss account and the figure shown in the balance sheet for prepayments.

to increase the figures shown in the balance sheet for both prepayments and creditors.

to increase the figure shown in the balance sheet for prepayments and to decrease the rates expense shown in the profit and loss account.

6.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Advertising expenditure paid by a firm during its first year in business but relating to a subsequent accounting period should be shown in the financial statements for the current accounting period . . .

as a prepayment in the balance sheet and as an expense in the profit and loss account.

as a deduction from the figure for bank in the balance sheet and as revenue in the profit and loss account.

as a prepayment in the balance sheet and as a deduction from the total of advertising expenditure paid in the profit and loss account.

as an accrual in the balance sheet and as revenue in the profit and loss account.

7.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

Which of the following statements is correct ?

The accounting concept which gives rise to adjustments at the end of an accounting period in respect of accruals and prepayments is the consistency concept.

A prepayment adjustment should be made in respect of each expense which is overpaid at the year-end.

Revenue should not be shown in the profit and loss account unless the associated money has been received.

None of the above.

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