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WAEC Financial Accounting 2008 Question 37

Question 37

Accounting Concepts and Conventions

A merchant paid N180,000 on rent for 18 months but charged N120,000 to profit and loss account for the year. The concept applied is

  1. A.business entity
  2. B.going concern
  3. C.accrual
  4. D.materiality.
Show the answer and explanation

Answer: C (accrual)

Explanation

Only the year's 12 months of rent are charged: accruals.