Cac.info@yahoo.

com Cell- 01740111966

STUDENT NAME: BATCH NO
SUBJECT: TIME: MARK:

32. On 1 August 2006 a company paid an insurance invoice of $3,600 for the year to 31 July 2007. What is the entry in
the balance sheet as at 31 December 2006.
A Accrual of $1,500 B Prepayment of $1,500
C Accrual of $2,100 D Prepayment of $2,100
33. The electricity account for the year ended 30 April 2006 was as follows:
Electricity accrued at 1 May 2005 250
Payments made during the year in relation to:
Quarter ending 30 June 2005 400
Quarter ending 30 September 2005 350
Quarter ending 31 December 2005 425
Quarter ending 31 March 2006 450
Which of the following is the appropriate record for electricity?
Accrued at Charge for the year ended
30 April 2006 30 April 2006
$ $
A Nil 1,375
B 150 1,525
C 300 1,675
D 450 1,825
34. At 1 January 2006 Nigel had accrued $300 in respect of light and heat. In the year ended 31 December 2006 he paid
$1,000 and at the end of the year estimated that he owed $350.
What is the charge to the income statement for the year ended 31 December 2006 in respect of light and heat?
A $1,050 B $950 C $1,350 D $1,300
35. A business made the following payments for rent on the first day of the period the payment relates to:
$5,000 for six months ending 31 August 2005
$5,500 for six months ending 28 February 2006
$6,000 for six months ending 31 August 2006
What is the charge to the income statement and the balance
sheet entry in respect of rent for the year ended 31 July 2006?
Income statement Balance sheet
A $11,333 $1,000 prepayment
B $11,333 $1,000 accrual
C $11,500 $2,000 prepayment
D $11,500 $2,000 accrual
36. Tony had estimated an accrual of $240 in respect of light and heat for the quarter ended 31 December 2005. On 29
January 2006 he paid $250 for the actual invoice received in respect of that quarter.
The bills for the next four quarters were as follows:
Amount Relating to Date paid
$260 q.e. 31 March 2006 15 April 2006
$220 q.e. 30 June 2006 17 July 2006
$210 q.e. 30 September 2006 14 October 2006
$230 q.e. 31 December 2006 18 January 2007
What is the charge to the income statement in respect of light and heat for the year ended 31 December 2006?
A $1,160 B $1,150 C $930 D $920
37. Carla cannot understand why her business had made a loss during the financial year and yet has more cash at the end
of the year than it did at the beginning of the year.
Which of the following could be a reason for this?
A Carla drew more out of the business this year than last year B Prepayments were higher at the end of this year
C Receivables took longer to pay this year than last year D Some non-current assets were sold during the year

Cac.info@yahoo.com Cell- 01740111966
38. An organisations year end is 30 September. On 1 January 2006 the organisation took out a loan of $100,000 with
annual interest of 12%. The interest is payable in equal instalments on the first day of April, July, October and January in
arrears.
How much should be charged to the income statement for the year ended 30 September 2006 and how much should be
accrued in the balance sheet for loan interest?
Income statement Balance sheet
A $12,000 $3,000
B $9,000 $3,000
C $9,000 Nil
D $6,000 $3,000

39. At the end of the financial year, a company makes a charge against income for expenses incurred but not yet invoiced.
This adjustment is in accordance with the concept of
A materiality B accruals C consistency D objectivity
40. Which of the following best describes accrued income?
A Income that relates to the current accounting period and has been received in the period.
B Income that relates to the current accounting period and will be received in a future period.
C Income that relates to the current accounting period and has been received in a prior period.
D Income that relates to a future accounting period and has been received in the current accounting period.
41. At 1 January 2006 Mortimer had a balance $200 in respect of rental income received in advance. He received $1,800
on 1 March 2006 as the rent receivable for the year to 28 February 2007.
What is the rental income to be included in the income statement for the year ended 31 December 2006?
A $1,400 B $1,500 C $1,700 D $1,800