Accounting for AQA: Part 1: Chapter 12

Question 1 Introduction

A prepayment of an expense at the year end is a payment made in advance of the accounting period to which it relates; it is added to the relevant expense and is shown as a current asset in the statement of financial position.

Question 1

Adjustments are made to the financial statements at the year end in order to improve the reliability of those statements in terms of providing information about the profitability, assets and liabilities of a business.

True

False

Question 2

The accounting concepts on which year-end adjustments are based are the accruals concept and the prepayments concept.

True

False

Question 3

An accrual of an expense is an amount unpaid at the end of an accounting period; it is added to the relevant expense in the income statement and is shown as a current liability in the statement of financial position.

True

False

Question 4

An accrual of an expense at the year end will be shown as a debit balance brought down in the relevant expense account.

True

False

Question 5

A prepayment of an expense at the year end is a payment made in advance of the accounting period to which it relates; it is added to the relevant expense and is shown as a current asset in the statement of financial position.

True

False

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Accounting for AQA: Part 1: Chapter 12

Page 1 of 2 - There are 10 questions in total.

Question 1 Introduction

Question 1

Adjustments are made to the financial statements at the year end in order to improve the reliability of those statements in terms of providing information about the profitability, assets and liabilities of a business.

Question 2

The accounting concepts on which year-end adjustments are based are the accruals concept and the prepayments concept.

Question 3

An accrual of an expense is an amount unpaid at the end of an accounting period; it is added to the relevant expense in the income statement and is shown as a current liability in the statement of financial position.

Question 4

An accrual of an expense at the year end will be shown as a debit balance brought down in the relevant expense account.

Question 5

A prepayment of an expense at the year end is a payment made in advance of the accounting period to which it relates; it is added to the relevant expense and is shown as a current asset in the statement of financial position.

AAT Q2022 Books

Accounting for AQA: Part 1: Chapter 12

Page 1 of 2 - There are 10 questions in total.

Question 1 Introduction

Question 1

Adjustments are made to the financial statements at the year end in order to improve the reliability of those statements in terms of providing information about the profitability, assets and liabilities of a business.

Question 2

The accounting concepts on which year-end adjustments are based are the accruals concept and the prepayments concept.

Question 3

An accrual of an expense is an amount unpaid at the end of an accounting period; it is added to the relevant expense in the income statement and is shown as a current liability in the statement of financial position.

Question 4

An accrual of an expense at the year end will be shown as a debit balance brought down in the relevant expense account.

Question 5

A prepayment of an expense at the year end is a payment made in advance of the accounting period to which it relates; it is added to the relevant expense and is shown as a current asset in the statement of financial position.