ACCA · Question 65 · The Use of Double-Entry and Accounting Systems
Section B - Case 2
Scenario: EcoBuild Ltd is preparing financial statements for the year ended 30 September 20X6. Draft profit before tax is $450,000. Adjustments required:
What is the correct double-entry to record the prepaid rent adjustment at year-end?
Answer options:
Debit Rent Expense $8,000; Credit Prepayments $8,000
Debit Prepayments $8,000; Credit Rent Expense $8,000
Debit Prepayments $12,000; Credit Rent Expense $12,000
Debit Rent Expense $4,000; Credit Bank $4,000
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