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WAEC Financial Accounting 2016 Question 17

Question 17

Accruals and Prepayments

Use the following information: Rent prepaid 1/01/2014 ₦600; Rent paid 31/12/2014 ₦3,000; Rent prepaid 31/12/2014 ₦400.
Rent for 2014 chargeable to the profit and loss account is

  1. A.₦4,000.
  2. B.₦3,200.
  3. C.₦3,000.
  4. D.₦2,800.
Show the answer and explanation

Answer: B (₦3,200.)

Explanation

Charge = prepaid at start 600 + paid 3,000 - prepaid at end 400 = ₦3,200.