PRC-1 · Chapter 4 · Question 71 of 100
A business has a beginning utilities accrual of Rs. 50,000 and an ending accrual of Rs. 60,000. During the year, it pays Rs. 80,000 in cash for utilities. What is the total utilities expense for the year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 90,000
Explanation
Expense = Cash paid (80,000) - Opening Accrual (50,000, representing last year's expense) + Closing Accrual (60,000, representing this year's unpaid expense) = Rs. 90,000.
More Accruals and Prepayments MCQs
- Q73Before finalizing the Statement of Financial Position, adjusting entries are required for: Rent received in advance Rs. 80,000; Unused…
- Q74Following the previous scenario (Rent received in advance Rs. 80,000; Unused office supplies Rs. 25,000; Accrued salary Rs. 22,500…
- Q75In accounting terminology, when a landlord refers to rent being 'in arrears', this is synonymous with:
- Q76If an entity receives Rs. 24,000 for a 12-month software subscription starting on September 1, what is the unearned revenue balance at its…
- Q77An entity paid Rs. 36,000 for a 12-month commercial insurance policy beginning on April 1. The financial year ends on December 31. What is…