A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2010 · Q11 Mark
On 1 January 2009 a business had prepaid rent of $50. During 2009, three rent payments were made of $250 each. On 31 December 2009, the business still owes $200 rent on account for 2009. The business owner has charged the rent payments made during 2009 in his income (profit and loss) account. What is the effect on net profit?
A$200 too high
B$200 too low
C$250 too high
D$250 too low
✓ Correct answer
C: $250 too high
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