Y10 Accounting - C11 Other Payables and Other Receivables

What is the matching principle?

• Including all expenses and incomes in the income statement

• Only including expenses and incomes related to the financial period

• Recording all transactions in cash

• Ignoring prepaid and accrued items

What is an accrued expense?

• An expense paid in advance

• An expense that is unpaid at the end of the accounting period

• An expense that has been paid and recorded

• An expense that is not related to the current financial period

How should prepaid expenses be recorded at year-end?

• As a current liability

• As a current asset

• As a cash outflow

• As an expense in the income statement

What happens to accrued income at year-end?

• It is ignored in the financial statements

• It is recorded as a current asset

• It is recorded as a current liability

• It is recorded as an expense

What is a prepaid income?

• Income received for services not yet performed

• Income that has been earned but not received

• Income that is recorded as an expense

• Income that is paid in advance for future services

What should be done with opening balances on expense accounts?

• They are recorded as liabilities

• They are always zero

• They must be considered when calculating expenses

• They should be ignored

What is the first step in recording an accrued expense during the year?

• Credit the cash book

• Debit the expense account

• Record it as a liability

• Ignore it until year-end

What is the purpose of year-end adjustments?

• To eliminate all liabilities

• To present a more accurate view of profit and loss

• To increase expenses

• To simplify the accounting process

What should be done with prepaid expenses at year-end?

• They should be recorded as income

• They should be recorded as liabilities

• They should be ignored

• They should be deducted from the amount paid

What is the treatment of combined expense accounts?

• The same matching principle applies

• They do not require any adjustments

• They are recorded as a single entry

• They are treated differently from single expense accounts