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JAMB Principles of Accounts 1997 Question 20

Question 20

Accruals and Prepayments

The recording of wages due but not yet paid is an example of an adjustment for

  1. A.apportionment of revenue between two periods
  2. B.recognizing accrued expenses
  3. C.recognizing unaccounted revenue
  4. D.recognizing prepaid expenses.
Show the answer and explanation

Answer: B (recognizing accrued expenses)

Explanation

Wages owing at the year end are an accrued expense.