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WorksheetsChap 9
Total questions: 39
Worksheet time: 22mins
1. A business preparing its financial statements for the year to 31 October pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. The annual rent was increased from £48,000 to £60,000 from 1 March 20X4. What figure should appear for rent in the SOPL for the year ended 31/10/20X4 and in the SOFP as at that date?
SOPL SOFP
A 56,000 10,000
B 52,000 5,000
C 56,000 5,000
D 55,000 10,000
A business has received telephone bills as follows:
A. 3,407.60
B. 3,351.60
C. 3,250.80
D. 3.463.60
3. A company receives rent form a large number of properties. The total cash received in the year ended 31/10/20X6 was £481,200. The following are the amounts of rent in advance and in arrears at 31/10/20X5 and 20X6:
A. 486,500
B. 460,900
C. 501,500
D. 475,900
4. A rent prepayment of £960 was treated as an accrual in a sole trader’s statement of profit or loss at the year end. As a result the profit was:
A. Understated by £960
B. Understated by £1,920
C. Overstated by £1,920
D. Overstated by £960
5. In the year ended 31 December 20X4, B Ltd received cash of £318,600 from subscribers to its website. Detail of subscriptions in advance and in arrears at the beginning and end of 20X4 are as follows:
A. £321,000
B. £336,400
C. £300,800
D. £316,200
6. A company receives rent for subletting part of its office block. Rent, receivable quarterly in advance, is received as follows:
A £33,500 Debit Accrued income (Debit) £6,000
B £33,500 Credit Deferred income (Credit) £6,000
C £34,000 Credit Deferred income (Credit) £3,000
D £34,000 Credit Accrued income (Debit) £3,000
7. During 20X4, Bibi paid a total of £60,000 for rent, covering the period from 1 October 20X3 to 31 March 20X5. What figures should be included in the financial statements for the year ended 31 December 20X4?
Statement of profit or loss Statement of financial position
A £40,000 £10,000 Prepayment
B £40,000 £15,000 Prepayment
C £50,000 £10,000 Accrual
D £50,000 £15,000 Accrual
8. A company pays rent quarterly in arrears on 1 January, 1 April, 1 July and 1 October each year. The rent was increased from £90,000 per year to £120,000 per year as from 1 October 20X2. What rent expense and accrual should be included in the company’s financial statements for the year ended 31 January 20X3?
Rent expense (SPL) Accrual (SFP)
A £100,000 £20,000
B £100,000 £10,000
C £97,500 £10,000
D £97,500 £20,000
9. A company owns a number of properties which are rented to tenants. The following information is available for the year ended 30 June 20X6
A £840,500
B £1,100,100
C £569,100
D £828,700
10. A company has sublet part of its offices and in the year ended 30 November 20X3 the rent receivable was:
A £9,900 £2,000 in other payables
B £9,900 £1,000 in other payables
C £9,600 £1,000 in other payables
D £9,600 £2,000 in other receivables
11. A business compiling its financial statements for the year to 31 July each year pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. The annual rent was increased from £60,000 per year to £72.000 per year as from 1 October 20X3. What figure should be included as the rent expense in the statement of profit or loss for the year ended 31 July 20X4?
A £69,000
B £62,000
C £70,000
D £63,000
12. At 1 July 20X4 a company had prepaid insurance of £8,200. On 1 January 20X5 the company paid £38.000 for insurance for the year to 30 September 20X5. What figures should be included for insurance in the company’s financial statements for the year ended 30 June 20X5?
Statement of profit or loss Statement of financial position
A £45,200 Prepayment £0
B £39,300 Prepayment £9,500
C £36,700 Prepayment £9,500
D ££39,300 Prepayment £0
13. A company sublets part of its office accommodation. In the year ended 30 June 20X5 cash received from tenants was £83,700. Details of rent in arrears and in advance at the beginning and end of the year were:
A £84,000
B £83,400
C £80,600
D £86,800
14. Details of a company's insurance policy are shown below: Premium for year ended 31 March 20X6 paid April 20X5 £10,800 Premium for year ending 31 March 20X7 paid April 20X6 £12,000 What figures relating to insurance should be included in the company's financial statements for the year ended 30 June 20X6?
Statement of profit or loss Statement of financial position
A £11,100 £9,000 prepayment (Debit)
B £11,700 £9,000 prepayment (Debit)
C £11,100 £9,000 accrual (Credit)
D £11,700 £9,000 accrual (Credit)
15. An organization's year end of 30 September. On 1 January 20X6 the organization took out a loan of £100,000 with annual interest of 12%. The interest is payable in equal instalments on the first day of April, July, October and January in arrears. How much should be charged to the statement of profit or loss for the year ended 30 September 20X6, and how much should be accurred on the statement of financial position?
Statement of profit or loss Statement of financial position
A £12,000 £3,000
B £9,000 £3,000
C £9,000 £0
D £6,000 £3,000
16. A business sublets part of its office accommodation. The rent is received quarterly in advance on 1 January, 1 April, 1 July and 1 October. The annual rent has been £24,000 for some years, but it was increased to £30,000 from 1 July 20X5. What amounts for this rent should appear in the company’s financial statements for the year ended 31 January 20X6. Statement of profit or loss Statement of financial position
A £27,500 £5,000 accrued income
B £27,000 £2,500 accrued income
C £27,000 £2,500 deferred income
D £27,500 £5,000 deferred income
17. The electricity account for the year ended 30 June 20X1 was as follows:
A £3,060
B £3,320
C £3,360
D £3,620
18. The year end of Murphy plc is 30 November 20X1. The company pays for its gas by a standing order of £600 per month. It had an opening accrual of £400 and a closing accrual of £500. What is the correct charge for gas to be included in Murphy Plc's statement of profit or loss for the year ended 30 November 20X1 ?
A £7,700
B £7,100
C £7,200
D £7,300
19. At 31 December 20X8 Blue Anchor Plc has an insurance prepayment of £250. During 20X9 they pay £800 in respect of various insurance contracts. The closing accrual for insurance is £90. What is the charge for insurance that should be included in the statement of profit or loss for the year ended 31 December 20X9?
A £460
B £800
C £960
D £1,140
20. At 31 March 20X7, accrued rent payable was £300. During the year ended 31 March 20X8, rent paid was £4,000, including an invoice for £1,200 for the quarter ended 30 April 20X8. What is the statement of profit or loss charge for rent payable for the year ended 31 March 20X8?
A £3,300
B £3,900
C £4,100
D £4,700
21. Constains plc. has an insurance prepayment of £320 at 31 March 20X2. During the year ended 31 March 20X2 Constains Plc paid two insurance bills, one for £1,300 and one for £520. What was the insurance prepayment at 31 March 20X1 if the charge for insurance for the year was £1,760?
A £200
B £260
C £320
D £380
22. The annual insurance premium for Boost Ltd for the period 1 July 20X6 to 30 June 20X7 is £13,200, which is 10% more than the previous year. Insurance premium are paid on 1 July. What is the statement of profit or loss charge for insurance for the year ended 31 December 20X6?
A £12,000
B £12,600
C £13,200
D £14,520
23. A gas accrual for £400 at the year end was treated as a prepayment in a business’s statement of profit or loss: As a result the profit was
A understated by £400
B overstated by £400
C understated by £800
D overstated by £800
24. At 31 December 20X2 the following matters require inclusion in a company's financial statements:
Current asset Current liabilities
A £22,000 £240
B £22,240 £0
C £10,240 £0
D £16,000 £6,000
(a)
26. A business has an accrual for electricity at 1 January 20X7 of £215 and has paid electricity bills of £3,420 during the year to 31 December 20X7. At 31 December 20X7 there is an accrual for electricity of £310 What is the electricity charge to be included in the statement of profit or loss for the year ended 31 December 20X7?
A £2.895
B £3,325
C £3,515
lD £3,945
27. A business has paid £ 10,400 of insurance premiums during the year ended 31 March 20X7. At 1 April 20X6 there was an insurance prepayment of £800 and at 31 March 20X7 there was a prepayment of £920 What is the insurance charge in the statement of profit or loss for the year ended 31 March 20X7?
A £8,680
B £10,280
C £10,400
D £10,520
(a)
29. Krim plc paid local property tax of £6,495 on 31 May 20X7, in respect of the three months ending 31 August 20X7. In the administrative expenses ledger account for the year ended 30 June 20X7 Krim plc must:
A debit £2,165
B credit £2,165
C debit £4,330
D credit £4,330
(a)
(a)
32. As at 30 November 20X4 Whitley plc had accrued distribution costs of £5,019 and prepaid distribution costs of £2,816. On 1 December 20X4 the bookkeeper processed the following opening journal: Credit Accruals £5,019, Debit Prepayments £2,816, Debit Distribution costs £2,203. During the year to 30 November 20X5 cash was paid in respect of distribution costs of £147,049 and was correctly posted to the distribution costs account. At the year end, Whitley plc's bookkeeper correctly processed closing journals to set up an accrual of £4,423 and a prepayment of £3,324 in respect of distribution costs. Which of the following journals should Whitley plc process as at 30 November 20X5 to correct the three accounts?
A Debit Accruals £ 10,038, Credit Prepayments £5,632, Credit Distribution costs £4,406
B Debit Accruals £5,019, Credit Prepayments £2,816, Credit Distribution costs £2,203
C Debit Distribution costs £4,406, Debit Prepayments £5,632, Credit Accruals £10,038
D Debit Distribution costs £2,203, Debit Prepayments £2,816, Credit Accruals £5,019
33. Bez plc draws up financial statements to 31 December in each year. It pays internet server charges for each year ending 30 April in two equal instalments, on 1 May and 1 November in advance. It also pays telephone rental charges quarterly in arrears at the end of February, April, July and November. The total internet server charge for the year to 30 April 20X6 was £9,000. Telephone rental charges for the year commencing 1 July 20X5 were £7,440.
(a)
34. Butters plc is finalising certain figures that will appear in its financial statement as at 30 June 20X5. On 1 March 20X4 the company paid an annual subscription to a trade association of £21.000 for the 12 months ended 28 Ferbruary 20X5. A 12.5% increase in this subscription is expected, but has not been finalised at 30 June 20X5. What will Butters included in its statement of financial position at 30 June 20X5 in respect of the subscription?
A an accrual of £15,750
B an accrual of £7,875
C a prepayment of £15,750
D prepayment of £7,875
35. Details of a company's insurance policy are shown below: Premium for year ending 31 March 20X7 paid April 20X6: £10,800 Insurance costs are included within administrative expenses. What is the double entry to reverse the opening accrual or prepayment in the year ended 30 June 20X7?
A Dr Administrative expenses £8,100 Cr Prepayment £8,100
B Dr Prepayments £8,100 Cr Administrative expenses £8,100
C Dr Administrative expenses £2,700 Cr Accruals £2,700
D Dr Accruals £2,700 Cr Administrative expenses £2,700
36. Alii Ltd owns a number of properties which are rented to tenants. Cash received from tenants in the year ended 30 June 20X6 was £834,600 which has been included as rental income in the year. The following information is available for the year ended 30 June 20X6:
A Debit Accrued income £144,600, Credit Deferred income £8,700, Credit Rental income £135,900
B Debit Accrued income £8,700, Debit Rental income £135,900, Credit Deferred income £144,600
C Debit Deferred income £144,600, Credit Accrued income £8,700, Credit Rental income £135,900
D Debit Deferred income £8,700, Debit Rental income £135,900, Credit Accrued income £144,600
37. A company has occupied rented premises for some years, paying an annual rent of £120,000. From 1 April 20X6 the rent was increased to £144,000 per year. Rent is paid quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. What is the journal entry to transfer the balance on the rent expense account to the profit and loss ledger when preparing the financial statements for the year ended 30 November 20X6?
A Debit Profit and loss ledger account £136,000, Credit Rent expense £136,000
B Debit Rent expense £ 136,000, Credit Profit and loss ledger account £136,000
C Debit Rent expense £ 138,000, Credit Profit and loss ledger account £138,000
D Debit Profit and loss ledger account £138,000, Credit Rent expense £138,000
38. What is the journal entry for an accrual of rent expenses of £500?
A Debit Prepayments £500, Credit Rent expense £500
B Debit Accruals £500, Credit Rent expense £500
C Debit Rent expense £500, Credit Accruals £500
D Debit Rent expense £500, Credit Prepayments £500
39. At 1 July 20X4 a company had prepaid insurance of £8,200. On 1 January 20X5 the company paid £38,000 for insurance for the year to 31 December 20X5.What is the journal entry to transfer the balance on the insurance expense account to the profit and loss ledger account for the year ended 30 June 20X5?
A Debit Profit and loss ledger account £27,200, Credit Insurance expense £27,200
B Debit Insurance expense £27,200, Credit Profit and loss ledger account £27,200
C Debit Profit and loss ledger account £36,700, Credit Insurance expense £36,700
D Debit Insurance expense £36,700, Credit Profit and loss ledger account £37,600
