Accounting Quiz Financial statement

Expenses paid in advance for next year

• Prepayments
• Accrued expenses
• Advance incomes
• Next year’s income

Treatment of Prepayments in Financial statements

• Decrease Income, increase Current asset
• Decrease expenses, increase Current asset
• Decrease expenses, increase Current Liability
• Increase expenses, increase Current asset

Expenses due for this year not paid

• Prepayments
• Accrued incomes
• Advance incomes
• Accrued Expense

Treatment of Accrued expenses in Financial statements

• Decrease Income, increase Current asset
• Decrease expenses, increase Current asset
• Decrease expenses, increase Current Liability
• Increase expenses, Increase Current liability

Income for the year, not received this year

• Prepayments
• Accrued income
• Advance incomes
• Accrued Expense

Treatment of Accrued incomes in Financial statements

• Increase incomes, increase current assets
• Decrease incomes, increase current assets
• Increase incomes, decrease current assets
• Decrease incomes, Decrease current assets

Income received for next year in the current year

• Prepayments
• Accrued expenses
• Advance Income
• Accrued incomes

Treatment of Advance income in the financial statements

• Increase incomes, increase current assets
• Decrease Income, increase Current Liability
• Increase incomes, decrease current assets
• Decrease incomes, Decrease current assets

Owners drawings of goods will come in payments in Cash budget

• false
• true

Net Sales - Cost of Goods sold

• Income for the year
• Net profit
• Goods available for sale
• Gross profit