Chapters 6 & 7 Income & Expenses

Select ALL Current Assets.

• Income Received in Advance

• Income Receivable

• Expense Payable

• Prepaid Expense

Select ALL Current Liabilities.

• Income Received in Advance

• Income Receivable

• Expense Payable

• Prepaid Expense

Interest expense is $100 per month. The business has paid $500 during the year. Which of the following information at year end is correct?

• Prepaid interest

  $400

• Prepaid interest

  $700

• Interest payable

  $400

• Interest payable

  $700

On 1 April 2022, the prepaid salaries expense was $900.

Cheques paid for salaries for the year ended 31 March 2023 was $2,500.

Calculate the salaries expense incurred

during the year ended 31 March 2023.

• $900

• $1,600

• $2,500

• $3,400

On 1 July 2024, the commission expense payable was $200.

Cheque paid for commission expense during the year ended 30 June 2025 was $800.

Calculate the commission expense incurred

during the year ended 30 June 2025.

• $200

• $600

• $800

• $1,000

On 1 January 2023, the interest income receivable was $450.

$700 cheque was received during the year ended 31 December 2023.

Calculate the amount of interest income earned

for the year ended 31 December 2023.

• $250

• $450

• $700

• $1,150

On 30 June 2022, the rent income received in advance was $5,000.

$3,000 cash was received for rent during the year ended 30 June 2023.

On 30 June 2023, the rent income receivable was $600.

Calculate the amount of rent income earned for the year ended 30 June 2023.

• $1,400

• $2,600

• $7,400

• $8,600

On 31 May 2022, the prepaid insurance expense was $800.

$1,500 rent was received during the year ended 31 May 2023.

On 31 May 2023, the prepaid insurance expense was $300.

Calculate the insurance expense incurred for the year ended 31 May 2023.

• $400

• $1,000

• $2,000

• $2,600

State the double entry to record

Rent expense incurred.

Dr _____________

Cr _____________

_________ basis of accounting

states that expenses are recognised when incurred

and income is recognised when earned

regardless whether payment is made.