Accruals and Prepayments Quiz

A business has a year ended 30 September 2024 and receives an invoice for rent of 6,000 for the six months to 31 December 2024 in November 2024. What accrual and prepayment is required in the year end accounts?

• 4,000 Prepayment

• 3,000 Accrual

During the year, a business paid an electricity bill for £900 for the 3 months to November 2024. The year end of the business is 30 September 2024, what accrual or prepayment is needed at the year end?

• 600 Prepayment

• 300 Accrual

A prepayment entry requires a debit or credit entry to the prepaid expenses account?

• Debit

• Credit

A business has an electricity accrual of £5,000 at the start of the year. They pay £8000 in the year and have an accrual of £6,000 at the end of the year. What is the electricity expense for the year?

• 9,000

• 14,000

An accrual is an expense not yet paid for. True or false?

• False

• True

A prepayment is an expense relating to the current accounting period. True or false?

• False

• True

In the current accounting period ended 31 October 2024, a business pays annual insurance for the year ending 30 June 2025 of £4,800. What is the prepayment at the end of the year?

• 800

• 3,200

• 4800

• 1600

Shortly after the end of the accounting period, a business receives an invoice for annual insurance to 31 August 2025 for £9,000. If the accounting period ended of 30 November 2024, what is the required accrual or prepayment?

• 2,250 Accrual

• 6,750 Accrual

• 2,250 Prepayment

• 6750 Prepayment

Accruals relate to expenses for a future accounting period. True or false?

• False

• True

During the current accounting period, a business prepays rent for the quarter ending 31 March 2025 for £6,000. If the current year end is 31 December 2024, what accrual or prepayment will be needed at the year end?

• 2000

• Zero

• 6000

• 4000