Adjusting Expenses & Income

What is the business's net profit for the financial year?

• $102,500
• $ 97,500
• $ 82,500
• $ 77,500

What is the business's net profit for the financial year?

• $105,000
• $ 95,000
• $ 85,000
• $ 75,000

Adjustments always appear

• as part of the trial balance.
• outside the trial balance.
• at any time during the period.
• at the start of a trading period.

Prepayments are regarded as

• an expense.
• a current liability.
• false spending.
• a current asset.

An accrual is

• part of sundry creditors.
• part of sundry debtors.
• an amount owing.
• a new debt.

Adjustments are found in the

• trading account.
• profit and loss account.
• balance sheet.
• trading & profit & loss account and balance sheet.

All adjustments must pass through the

• general journal.
• cash book.
• general ledger.
• subsidiary ledgers.

The accrual principle means that

• the business deals in credit.
• businessess always pay debts on time.
• items must be included in the accounts of the period to which they apply.
• all income and expenditure is recorded when it happens.

Accrued expenses

• are regarded as an asset.
• are outstanding liabilities.
• are expenses incurred.
• are not forseen by the business.

Accrued receipts are

• earned in the current period but not yet received.
• regarded as a liability.
• earned in the next period.
• earnings paid in advance.