PRC-1 · Chapter 10 · Question 59 of 100
If a business has a trial balance figure for 'Rent, Rates and Insurance' of Rs. 5,100, and year-end adjustments reveal a prepayment of Rs. 450, what is the adjusted expense to be shown in the Statement of Comprehensive Income?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 4,650
Explanation
Prepaid expenses relate to future periods and must be deducted from the current year's paid amount. Adjusted expense = Rs. 5,100 - Rs. 450 = Rs. 4,650.
More Preparation of Financial Statements MCQs
- Q61If the total of Current Assets is Rs. 5,400 and the total of Current Liabilities is Rs. 4,200, what is the value of Net Current Assets…
- Q62A business took a loan of Rs. 5,000 at an interest rate of 12% per annum. What is the accrued interest expense for one quarter (3 months)?
- Q63If an entity pays Rs. 12,000 for an annual maintenance contract starting on 1 May and its financial year ends on 31 December, what is the…
- Q64In a partnership, Partner A and B share residual profits 3:2. If the net profit is Rs. 100,000, and Partner A is entitled to a salary of…
- Q65Which of the following items is treated as a selling and distribution expense?