QUESTION BANK
CHAPTER 9: ACCRUALS AND PREPAYMENTS
1. 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:
31/10/20X5 31/10/20X6
Rent received in advance 28,700 31,200
Rent in arrears (all subsequently received) 21,200 18,400
What amount of rental income should be included in the company’s SOPL for the
year ended 31/10/20X6
A. 486,500
B. 460,900
C. 501,500
D. 475,900
2. 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:
All 31/12/20X4 31/12/20X3
Subscriptions received in advance 28,400 24,600
Subscriptions owing 18,300 16,900
subscriptions owing were subsequently received.
What figure for subscriptions income should be included in the statement of profit or
loss of B Ltd for 20X4?
A. £321,000
B. £336,400
C. £300,800
D. £316,200
3. A company receives rent for subletting part of its office block. Rent, receivable
quarterly in advance, is received as follows:
Date of receipt Period covered £
1 October 20X1 3 months to 31 December 20X1 7,500
30 December 20X1 3 months to 31 March 20X2 7,500
4 April 20X2 3 months to 30 June 20X2 9,000
1 July 20X2 3 months to 30 September 20X2 9,000
1 October 20X2 3 months to 31 December 20X2 9,000
What figures, based on these receipts, should be included in the company's financial
statements for the year ended 30 November 20X2?
Statement of profit or Statement of financial position
loss
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
4. A company owns a number of properties which are rented to tenants. The
following information is available for the year ended 30 June 20X6
Rent in advance Rent in arrears
£ £
30 June 20X5 134,600 4,800
30 June 20X6 144,400 8,700
Cash received from tenants in the year ended 30 June 20X6 was £834,600
All rent in arrears was subsequently received.
What figure should appear in the company’s statement of profit or loss for rent
receivable in the year ended 30 June 20X6
A £840,500
B £1,100,100
C £569,100
D £828,700
5. 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:
In arrears In advance
£ £
30 June 20X4 3,800 2,400
30 June 20X5 4,700 3,000
All arrears of rent were subsequently received.
What figure for rental income should be included in the company's statement of profit
or loss for the year ended 30 June 20X5?
A £84,000
B £83,400
C £80,600
D £86,800
6. The electricity account for the year ended 30 June 20X1 was as follows:
£
Opening balance for electricity accrued at 1 July 20X0 300
Payments made during the year
1 August 20X0 for three months to 31 July 20X0 600
1 November 20X0 for three months to 31 October 20X0 720
1 February 20X1 for three months to 31 January 20X1 900
30 June 20X1 for three months to 30 April 20X1 840
On 1 August 20X1 a payment of £840 was made for the three months ended 31 July
20X1 What is the charge for electricity that should be included in the statement of
profit or loss for the year ended 30 June 20X1?
A £3,060
B £3,320
C £3,360
D £3,620
7. At 31 December 20X2 the following matters require inclusion in a company's
financial statements:
1 On 1 January 20X2 the company made a loan of £12,000 to an employee,
repayable on 30 April 20X3, charging interest at 2% per year. On the due
date she repaid the loan and paid the whole of the interest due on the loan
to that date.
2 The company has paid insurance £9,000 in 20X2, covering the year ending
31 August 20X3.
3 In January 20X3 the company received rent from a tenant £4,000 covering
the six month to 31 December 20X2.
For these items. What total figures should be included in the company’s statement of
financial position at 31 December 20X2?
Current Current liabilities
asset
A £22,000 £240
B £22,240 £0
C £10,240 £0
D £16,000 £6,000
8. 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:
Rent in advance Rent in arrears
£ £
30 June 20X6 144,600 8,700
All rent in arrears was subsequently received.
What is the journal entry to adjust Alii Ltd's rental income 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