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03/10/2026

35) ABC Limited receives advance rent from its tenant of CAD1 million on 31st December in respect of office rent for the following year. What would be the accounting entry in the following year?

(a) Accrued rent (debit) = CAD1 million and rental income (credit) = CAD1 million
(b) Advanced rent (debit) = CAD1 million and rental income (credit) = CAD1 million

01/10/2026

34) ABC Limited receives advance rent from its tenant of CAD.1 million on 31st December in respect of office rent for the following year.
ABC Ltd. has an accounting year end of 31st December. What accounting entry is to be passed in this year?

(a) Cash (debit) = CAD.1 million and Advance rent – liability (credit) = CAD.1 million
(b) Cash (debit) = CAD.1 million and Accrued rent (credit) = CAD.1 million

29/09/2026

33) XYZ Ltd. receives interest of CAD 100,000 on bank deposit for the month of December 2025 on 3rd January 2026. XYZ Ltd has an accounting year end of 31st December.
What would be the accounting entry when subsequently on 3rd January, payment for interest is received?

(a) Prepaid interest (debit) = CAD100,000 and Interest income (credit) = CAD100,000
(b) Cash (debit) = CAD100,000 and Interest receivable (credit) = CAD 100,000

28/09/2026

32) XYZ Ltd. receives interest of CAD 100,000 on bank deposit for the month of December 2025 on 3rd January 2026. XYZ Ltd has an accounting year end of 31st December.
What would be the accounting entry for such transaction?

(a) Cash (debit) = CAD100,000 and Prepaid interest (credit) = CAD100,000
(b) Interest receivable (debit) = CAD100,000) and interest income (credit) = CAD100,000

26/09/2026

31) On 31 October 2025, a business pays annual insurance premium of CAD 600,000. What is the prepayment at the end of the year (31 December 2025)?

(a) Nil
(b) CAD 500,000

25/09/2026

30) A business has a beginning utilities accrual of CAD 50,000, an ending accrual of CAD 60,000, and during the year, it pays for utilities of CAD 80,000. What is the amount of utilities expense?

(a) CAD 70,000
(b) CAD 90,000

24/09/2026

29. During the year, a business paid an electricity bill for CAD 900,000 for the 3 months to November. The year end of the business is 30 September, what accrual or prepayment is needed at the year end?
(a) Prepaid electricity = CAD 600,000
(b) Accrued electricity = CAD 600,000

23/09/2026

28. A business has a year ended 30 September and receives an invoice for rent of CAD 600,000 for the six months to 31 December. What accrual or prepayment is required for the invoice in the year end accounts?
(a) Prepaid rent = CAD 300,000
(b) Accrued rent = CAD 300,000

22/09/2026

27. Staff salary remaining unpaid as at the year-end should be accounted for as:
(a) Accrued Salary (debit) and Staff salary expense (credit)
(b) Staff salary expense (debit) and accrued salary (credit)

21/09/2026

26) Which of the following is not true?

(a) An accrual is a liability, a prepayment is an asset
(b) An accrual is a liability, a prepayment is always a non-current asset

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