The trial balance shows insurance costs as £2,800, but there is a prepayment of £500:
- an expense of £3,300 will be shown in the profit and loss account
- an expense of £2,300 will be shown in the profit and loss account
- prepayments of £3,300 will be shown under current assets in the balance sheet
- prepayments of £500 will be shown under current liabilities in the balance sheet
The trial balance shows electricity costs as £1,200, but there is an accrual of £300:
- an expense of £1,500 will be shown in the profit and loss account
- an expense of £900 will be shown in the profit and loss account
- accruals of £1,500 will be shown under current liabilities in the balance sheet
- accruals of £300 will be shown under current assets in the balance sheet
The trial balance shows telephone costs as £144, but there is a prepayment of £24:
- an expense of £24 will be shown in the profit and loss account
- an expense of £144 will be shown in the profit and loss account
- prepayments of £24 will be shown under current assets in the balance sheet
- prepayments of £120 will be shown under current liabilities in the balance sheet
Net current assets on the balance sheet represent:
- fixed assets plus creditors due within 12 months
- current assets plus creditors due within 12 months
- fixed assets minus creditors due within 12 months
- current assets minus creditors due within 12 months
If a business has non-sales revenue, it is shown in the profit and loss account as:
- a deduction from sales
- an addition to net profit
- an addition to gross profit
- a deduction from gross profit
If a business has received interest of £600, but estimates a further £150 may have accrued:
- interest payable of £750 is shown in the profit and loss account
- interest payable of £450 is shown in the profit and loss account
- interest receivable of £600 is shown in the profit and loss account (prudence concept)
- interest receivable of £750 is shown in the profit and loss account