MENU
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?
Suggested Answer: A
Get Premium CIMAPRA17-BA3-1 Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
34 comments · newest first
JE
Jenifer
10 months ago
I’m not sure about this, seems a bit tricky.
ON
Oneida
10 months ago
Totally agree, it's for two months ahead!
LA
Lachelle
11 months ago
Yup, $2,000 is already used up by March 31.
MA
Margot
11 months ago
Wait, how is it $4,000? I thought it was $6,000.
ME
Meghan
11 months ago
The prepayment is $4,000.
TE
Teri
11 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.
GR
Gregoria
12 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.
CH
Chandra
12 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.
CA
Carisa
12 months ago
I remember we discussed prepayments in class, but I'm not sure how to calculate the exact amount for this scenario.
TA
Tamekia
1 year 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.
TA
Talia
1 year 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.
PA
Paris
1 year 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?
VI
Vincent
1 year 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.
TR
Tresa
1 year 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.
AM
Amie
1 year ago
User 3: I believe it's D) Nil
LE
Leota
1 year ago
User 2: I'm going with B) $4,000
NI
Nicolette
1 year ago
User 1: I think it's A) $2,000
HE
Herman
1 year 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.
ME
Merri
1 year ago
Actually, the correct answer is A) $2,000. Only one-third of the payment should be prepaid at the year end.
SA
Sarah
1 year ago
I agree with you, it should be B) $4,000. That makes sense.
RE
Reyes
1 year 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.
AL
Alex
1 year 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.
AL
Allene
1 year 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.
GA
Gayla
1 year 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.
FA
Fannie
1 year 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.
IL
Iluminada
1 year 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.
LA
Lashandra
2 years 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.
DO
Dominque
1 year ago
So, the prepayment shown in the accounts at the year end will be $4,000.
WI
Willow
1 year ago
That makes sense, two-thirds of the payment will be prepaid.
ER
Erick
1 year ago
Yes, you're right. The prepayment will be $4,000.
DE
Devorah
1 year ago
I think the correct answer is B) $4,000.
GA
Gary
2 years ago
But the rent was only for two out of the three months, so it should be $4,000 as a prepayment.
LO
Lorenza
2 years ago
I disagree, I believe the answer is B) $4,000.
GA
Gary
2 years ago
I think the answer is A) $2,000.