Adjustment for Accrued Income

Q.

I Want Tuition Fee Certificate From School How To Write An Application

Q.

What Are the Three Limitations of the Income Statement?

Q.

What is outstanding income?

Q.

Cash column of the cash book will always have a debit balance. Why ?

Q.

What is the correct adjustment entry for accrued interest on investments of Rs 1, 000?

1. Interest on investment A/c Dr 1, 000
   To Interest receivable A/c 1, 000

2. Interest receivable A/c Dr 1, 000
   To Interest on investment A/c 1, 000

3. Interest on investment A/c Dr 1, 000
   To Prepaid interest A/c 1, 000

4. Outstanding interest A/c Dr 1, 000
   To Interest on investement A/c 1, 000

Q.

Having agreed on a monthly rent of Rs 18, 000 for business premises rented to Mr Ravi, three months rent was in arrears as at 31st March 2018. What will appear as rent accrued in the financial statements as at 31st March 2018?

1. Rs 18, 000

2. Rs 36, 000

3. Rs 54, 000

4. None of the above

Q. A Van was purchased on 1st April, 2015 for ₹ 60, 000 and ₹ 5, 000 was spent on its repair and registration. On 1st October, 2016 another van was purchased for ₹ 70, 000. On 1st April, 2017, the first van purchased on 1st April, 2015 was sold for ₹ 45, 000 and a new van costing ₹ 1, 70, 000 was purchased on the same date. Show the Van Account from 2015-16 to 2017-18 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.

Q.

Give any three examples of revenues.

Q.

How does failure to record accrued revenue distort the financial statements?

1. It understates revenue and current assets

2. It understates revenue and current liabilities

3. It overstates revenue and current liabilities

4. None of the above

Q.

Accrued Incomes are considered as ___

1. Liability

2. Expense

3. Asset

4. Capital

Q.

What do you understand by Accrued Income?

1. Incomes which have been earned & received

2. Income earned by a company for providing a service or selling a product for which money is yet to be received.

3. Incomes which are yet to be earned

4. None of the above

Q.

Accrued Revenues are:

1. Revenues that have been earned, but not collected

2. When a customer pays in advance for receiving the service

3. Revenues that have been recorded

4. Revenues that have been collected, but not yet earned

Q.

The Fine Repairing Company provides repairing services amounting to Rs 25, 000 to Monster Company on March 25, 2018. The Monster Company promises to pay the service fee on June 15, 2018. No service revenue has been recorded by the Fine Repairing Company until the end of its accounting period i.e March 31, 2018. What shall be the adjusting entry as at 31st March 2018?

1. None of these

2. Income on services A/c Dr	25, 000
   To Monstor company A/c	25, 000

3. Monstor company A/c Dr	25, 000
   To Income on services A/c	25, 000

4. Income on services A/c Dr	25, 000
   To Cash A/c	25, 000

Q. Question

Q. The correct adjustment entry for recording accrued interest on investment is:

Interest receivable A/c Dr
To Interest on investment A/c

1. False
2. True

Q. While passing an adjustment entry for accrued interest on investments, interest receivable account is credited.

1. True
2. False