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

Preparation of financial statements — practice question

At the start of the financial year on 1 July, a business has an accrual on the rent account of $600. Over the financial year, rent payments were made as shown below: 26 July: paid 3 months' rent to 31 July: $900 11 November: paid 4 months' rent to 30 November: $1200 15 March: paid 4 months' rent to 31 March: $1200 What amount should be shown as a prepayment or accrual for rent at the end of the financial year on 30 June?

  • A$600 accrual
  • B$600 prepayment
  • C$900 accrual
  • D$900 prepayment

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