TQ1: CHAPTER 6 - ACCRUALS AND PREPAYMENTS

• A/ 5,400,000 KHR

• B/ 5,500,000 KHR

• C/ 5,800,000 KHR

• D/ 6,600,000 KHR

A company pays rental costs for a printing machine. Rental payments are made

in advance every three months, on 1 March, 1 June, 1 September and 1

December. Rental costs were 3,600,000 KHR per year but went up to 4,200,000

KHR per year. The first rental payment at the higher charge was on 1 June Year

7.

What rental cost will be included in the trial balance for the year to 31 December

Year 7 after making any necessary adjustments for accruals and prepayments?

• A/ 3,900,000 KHR

• B/ 3,950,000 KHR

• C/ 4,050,000 KHR

• D/ 3,850,000 KHR

A company owns a property and rents out a small office in the building to a

tenant, who pays the rental quarterly in advance on 1 February, 1 May, 1 August

and 1 November each year. The rental charge was 9,600,000 KHR per year but

was increased to 10,800,000 from 1 November Year 6.

What is the amount of rental income that would be included in the trial balance

for the year to 30 June Year 7 after making any necessary adjustments for

accruals and prepayments?

• A/ 10,400,000 KHR

• B/ 10,000,000 KHR

• C/ 10,200,000 KHR

• D/ 9,900,000 KHR

A company pays subscriptions for membership of an industrial association.

Subscription fees are paid six-monthly in advance, on 1 September and 1 March

each year. The annual subscription is 6,600,000 KHR.

What is the accrued expense or the prepaid expense for membership

subscription charges, at the end of its financial year on 30 June Year 8?

• A/ Prepaid expense 1,100,000 KHR

• B/ Prepaid expense 2,200,000 KHR

• C/ Accrued expense 1,100,000 KHR

• D/ Accrued expense 2,200,000 KHR

On 31 May, 20X8, a company paid two years rent of 500,000,000 KHR which was debited to

the rent account.

At 31 December, 20X8, what portion of that amount was prepaid?

• A/ 145,833,000 KHR

• B/ 250,000,000 KHR

• C/ 354,167,000 KHR

• D/ 374,150,000 KHR

On 31 May, 20X8, a company paid two years rent of 500,000,000 KHR which was debited to

the rent account.

What is the adjustment needed to reflect the rent charged for the year ended 31

December, 20X8?

• A- Debit rent account and credit adjustment account

• B- Debit prepayment account and credit rent account

• C- Debit rent account and credit prepayment account

• D- Debit adjustment account and credit prepayment account

A company occupies its head office premises under a rental agreement, and rent

is payable quarterly in advance, on 1 February, 1 May, 1 August and 1 November

each year. The annual rent was increased recently from 480,000,000 KHR to

540,000,000 KHR per year, from 1 November Year 6.

What figure should be included as rental expense for the company's financial

year to 30 June Year 7?

• A/ 480,000,000 KHR

• B/ 500,000,000 KHR

• C/ 520,000,000 KHR

• D/ 525,000,000 KHR

A company occupies its head office premises under a rental agreement, and rent

is payable quarterly in advance, on 1 February, 1 May, 1 August and 1 November

each year. The annual rent was increased recently from 480,000,000 KHR to

540,000,000 KHR per year, from 1 November Year 6.

What will be included in the trial balance at 30 June Year 7 for rental expenses

after making any necessary adjustments for accruals and prepayments?

• A- Accrued expenses (liability) 45,000,000 KHR

• B- Accrued expenses (liability) 90,000,000 KHR

• C- Prepaid expenses (asset) 45,000,000 KHR

• D- Prepaid expenses (asset) 90,000,000 KHR

A company has sub-let some of its office premises. In the year to 31 October

Year 7 the rent receivable was:

(1) up to 30 June Year 7: 14,400,000 KHR per year

(2) from 1 July Year 7: 16,800,000 KHR per year.

Rent is paid quarterly in advance on 1 January, 1 April, 1 July and 1October.

What amounts should appear in the company’s trial balance at 31 October Year

7 after making any necessary adjustments for accruals and prepayments?

• A/ 15,200,000 KHR income 1,400,000 KHR in sundry payables

• B/ 15,200,000 KHR income 2,800,000 KHR in sundry payables

• C/ 15,200,000 KHR income 2,800,000 KHR in sundry receivables

• D/ 15,600,000 KHR income 1,400,000 KHR in sundry receivables

• A/ 689,300,000 KHR

• B/ 616,100,000 KHR

• C/ 860,700,000 KHR

• D/ 787,500,000 KHR