O-LevelAccountingAccounting procedures7707/12 · May/June 2017 · Q101 Mark

Maria started a business on 1 May 2016. The monthly rates on her business premises are $100. During the year ended 30 April 2017 she paid rates of $1300. Which journal entry will Maria make on 30 April 2017 to transfer the rates to the income statement?

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Aincome statement (debit $1200), rates (credit $1200)

Bincome statement (debit $1300), rates (credit $1300)

Crates (debit $1200), income statement (credit $1200)

Drates (debit $1300), income statement (credit $1300)

✓ Correct answer

A: income statement (debit $1200), rates (credit $1200)

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Topic: Accounting procedures, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2017 Paper 1 Variant 2, question 10.

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