Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Marianna lets Paul use a section of her premises. On 1 April 2020, the rent receivable account carried a balance of $800, because Paul still owed rent for the final month of the financial year that ended on 31 March 2020. With effect from 1 April 2020, the annual rent rose by $5\%$. During the year ending 31 March 2021, Marianna received a total of $10\,040 from Paul. Which amounts ought to be entered in Marianna’s financial statements for the year ended 31 March 2021?

  • Aincome statement $10\,040$, current assets $800$
  • Bincome statement $10\,040$, current assets $840$
  • Cincome statement $10\,080$, current assets $800$
  • Dincome statement $10\,080$, current assets $840$

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