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Total questions: 20
Worksheet time: 10mins
What is difference between accrued expenses and prepaid expenses? (tick 2 boxes)
accrued expenses = not yet paid for the current year
prepaid expenses = paid in advance for the next accounting period
accrued expenses = paid for the current year
prepaid expenses = not paid for next accounting year
accrued expenses = posted as current asset
prepaid expenses = posted as current liability
accrued expenses = posted as current liability
prepaid expenses = posted as current asset
The revenue recognition principle dictates that revenue should be recognized in the accounting records:
when cash is received.
when it is earned.
at the end of the month.
in the period that income taxes are paid.
Failed to pay $1000 of rent this year
Prepaid expenses
Accrued expenses
Prepaid income
Accrued income
The payment for electricity includes $500 relating to the following year
Prepaid expenses
Accrued expenses
Prepaid income
Accrued income
A business receive interest from an investment, but is owed interest of $200 this year
Prepaid expenses
Accrued expenses
Prepaid income
Accrued income
What is accrued expense?
Business has incurred expense, but has not paid (still owe).
Business has not incurred expense, but has paid.
What is income received in advance?
Business has earned the income, but has not received the money.
Business has not earned the income, but has received the money.
What is income receivable/ accrued income?
Business has earned the income, but has not received the money.
Business has not earned the income, but has received the money.
On 1 June 2017, a cheque of $33,000 was paid for 10 months from 1 June 2017 to 31 March 2018. 2 months of rent was outstanding.
What is the account and amount to be recorded in the statement of financial position as at 31 May 2018?
$3300 accrued rental expense
$3300 prepaid rental expense
$6600 accrued rental expense
$6600 prepaid rental expense
Prepaid rent is recorded as ____ in the Balance Sheet.
Current assets
Current liabilities
What is accrued expense?
Amount paid but not earned yet
Amount paid but not incurred yet
Amount not paid but incurred
Amount not paid but earned
In which section of the statement of financial position would you find accrued commission received?
Non-Current Assets
Current Assets
Equity
Non-Current Liabilities
Current Liabilities
In which section of the statement of financial position would you find accrued advertising?
Non-Current Assets
Current Assets
Equity
Non-Current Liabilities
Current Liabilities
What is prepaid expense?
Amount paid but not earned yet
Amount paid but not incurred yet
Amount not paid but incurred
Amount not paid but earned
Anjum rents part of her premises to Ajay for $6120 per annum. At the beginning of the year Ajay had paid two months rent in advance. At the end of the year Ajay had paid three months rent in advance.
How much rent was received from Ajay during the year?
$3570
$5610
$6630
$8670
What is accrued expense?
Amount paid but not earned yet
Amount paid but not incurred yet
Amount not paid but incurred
Amount not paid but earned
What is prepaid expense?
Amount paid but not earned yet
Amount paid but not incurred yet
Amount not paid but incurred
Amount not paid but earned
Accrued salaries is recorded as ____ in the SOFP.
Current assets
Current liabilities
Prepaid rent is recorded as ____ in the SOFP.
Current assets
Current liabilities
On 31 May, 20X8, a company paid two years rent of 500,000,000 KHR which was debited to
the rent account.
What is the adjustment needed to reflect the rent charged for the year ended 31
December, 20X8?
A- Debit rent account and credit adjustment account
B- Debit prepayment account and credit rent account
C- Debit rent account and credit prepayment account
D- Debit adjustment account and credit prepayment account
