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CIMAPRA17-BA3-1 Exam - Topic 3 Question 109 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam
Question #: 109
Topic #: 3
[All CIMAPRA17-BA3-1 Questions]

On 1 March, a company made a payment of $6,000, in respect of rent for the quarter 1 March - 31 May. The company's year end was 31 March.

What will be the amount of the prepayment shown in the accounts at the year end?

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Suggested Answer: A

by Natalie at Mar 22, 2025, 07:42 PM

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Jenifer
2 months ago
I’m not sure about this, seems a bit tricky.
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Oneida
2 months ago
Totally agree, it's for two months ahead!
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Lachelle
3 months ago
Yup, $2,000 is already used up by March 31.
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Margot
3 months ago
Wait, how is it $4,000? I thought it was $6,000.
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Meghan
3 months ago
The prepayment is $4,000.
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Teri
3 months ago
This seems similar to a practice question we did on prepayments, but I can't remember if we included the month of payment or just the future months.
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Gregoria
4 months ago
I think the prepayment would be $4,000 because that's the amount for April and May, but I’m a bit confused about how to present it in the accounts.
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Chandra
4 months ago
If I recall correctly, the rent covers three months, and since the year-end is at the end of March, we should only account for the rent for March in the current period.
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Carisa
4 months ago
I remember we discussed prepayments in class, but I'm not sure how to calculate the exact amount for this scenario.
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Tamekia
4 months ago
Easy peasy! The payment was for the quarter, and the year-end was on March 31, so the prepayment would be the amount covering the last 2 months of that quarter, which is $4,000.
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Talia
4 months ago
Okay, I think I've got it. The payment covers the quarter from March 1 to May 31, and the year-end is March 31. So the prepayment would be the amount covering the period from April 1 to May 31, which is 2 months out of the 3-month quarter.
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Paris
5 months ago
Hmm, I'm a bit confused. Do I need to calculate the amount of rent per day and then multiply it by the number of days after the year-end? Or is there an easier way to approach this?
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Vincent
5 months ago
This looks like a straightforward prepayment question. I just need to figure out how much of the $6,000 payment covers the period after the year-end.
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Tresa
10 months ago
Oh, this is a tricky one! I'm going to have to go with B) $4,000 and hope I'm not 'rent'ing a spot in the wrong column.
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Amie
8 months ago
User 3: I believe it's D) Nil
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Leota
9 months ago
User 2: I'm going with B) $4,000
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Nicolette
9 months ago
User 1: I think it's A) $2,000
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Herman
10 months ago
I'm leaning towards A) $2,000. Since the payment covers three months, and the year-end is on the first month, only one-third of the payment should be prepaid.
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Merri
8 months ago
Actually, the correct answer is A) $2,000. Only one-third of the payment should be prepaid at the year end.
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Sarah
8 months ago
I agree with you, it should be B) $4,000. That makes sense.
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Reyes
8 months ago
I think it would be B) $4,000. Since the payment covers three months, and the year-end is on the first month, two-thirds of the payment should be prepaid.
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Alex
10 months ago
I'm going with C) $6,000. The company made a payment of $6,000, so that's the amount that should be shown as a prepayment in the accounts at the year-end.
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Allene
9 months ago
I'm not sure, but I think it might be A) $2,000. The prepayment amount should only cover the rent for the period after the year end.
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Gayla
9 months ago
I agree with you, it should be B) $4,000. The remaining month of rent should be expensed in the current year, not shown as a prepayment.
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Fannie
10 months ago
I think it's B) $4,000. The payment made on 1 March covers rent for the quarter 1 March - 31 May, so only 2 out of the 3 months are within the year end.
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Iluminada
10 months ago
I'm pretty sure the answer is D) Nil. The entire $6,000 payment should be recognized as an expense for the year, since the year-end is 31 March.
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Lashandra
10 months ago
Hmm, I think the correct answer is B) $4,000. The company made a payment of $6,000 for the quarter, but since the year-end is 31 March, only two-thirds of the payment will be prepaid.
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Dominque
8 months ago
So, the prepayment shown in the accounts at the year end will be $4,000.
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Willow
9 months ago
That makes sense, two-thirds of the payment will be prepaid.
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Erick
9 months ago
Yes, you're right. The prepayment will be $4,000.
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Devorah
10 months ago
I think the correct answer is B) $4,000.
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Gary
11 months ago
But the rent was only for two out of the three months, so it should be $4,000 as a prepayment.
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Lorenza
11 months ago
I disagree, I believe the answer is B) $4,000.
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Gary
11 months ago
I think the answer is A) $2,000.
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