The Commerce Education

03) Rihanna determines at year end that Salaries paid during the year include Rs. 10,000 in advance.
What is the correct year end adjustment for advance salary to be made?
(a) Dr Salaries Rs. 10,000 Cr Advance salaries Rs. 10,000
(b) Dr Salaries Rs. 10,000 Cr Accrued salaries Rs. 10,000
(c) Dr Advance salaries Rs. 10,000 Cr Salaries expense Rs. 10,000
(d) No entry required

02) On 1 March 2025, Samantha pays an insurance premium of Rs. 2,400 for the period to 28 February 2026.
What is the charge to the statement of profit or loss for the year ended 31 October 2025 and prepayment in the Statement of Financial Position as at that date?
(a) Charge for SPL Rs. 800 and Prepayment Rs. Rs. 1,600
(b) Charge for SPL Rs. 1,600 and Prepayment Rs. 800
(c) Charge for SPL Rs. 2,400 and Prepayment 0
(d) Charge for SPL 0 and Prepayment Rs. 2,400

01. In the year to 31 December 2025, Samantha received US$ 50,800 rental income. The amounts of rent received in advance and due in arrears were as follows:
31 Dec 2025 31 Dec 2024

Rent received in advance 4,000 3,000
Rent due in arrears (accrued) 2,500 1,700

What figure for rental income should be recorded in the statement of profit or loss for the year ended 31 December 2025?
(a) US$. 50,800
(b) US$. 50,600
(c) US$. 54,500
(d) US$. 56,000

50. Which statement is true?
(a) The debit balance accounts are closed at the end of accounting period while the credit balance
accounts are carried forward to next year
(b) The credit balance accounts are closed at the end of accounting period while the debit balance
accounts are carried forward to next year
(c) Income, expenses and drawings accounts are closed at the end of accounting period while assets,
liabilities and capital accounts are carried forward to next year
(d) Income, expenses and capital accounts are closed at the end of accounting period while assets,
liabilities and drawings accounts are carried forward to next year

49. At the end of accounting period, drawings account has balance of Rs. 8,000, it shall be transferred to:
(a) Debit side of Capital account
(b) Credit side of Capital account
(c) Debit side of profit or loss
(d) Credit side of profit or loss

48. At the end of accounting period, an entity incurred net loss of Rs. 15,000 it shall be transferred to:
(a) Debit side of Capital account
(b) Credit side of Capital account
(c) Debit side of profit or loss
(d) Credit side of profit or loss

47. At the end of accounting period, all debit items of income and expenses are transferred to:
(a) Debit side of Capital account
(b) Credit side of Capital account
(c) Debit side of profit or loss
(d) Credit side of profit or loss

46. At the end of accounting period, all credit items of income and expenses are transferred to:
(a) Debit side of Capital account
(b) Credit side of Capital account
(c) Debit side of profit or loss
(d) Credit side of profit or loss

45. Which of the following are true with reference to a trial balance?
(a) Trial balance is taken as a test of arithmetical accuracy
(b) It is starting point for producing financial statements
(c) It is conclusive proof that double entry book-keeping is free from errors
(d) (a) and (b) only