A business is completing its financial records for this financial year and realises that it has not yet paid its energy bill for the last two months, which is yet to be received. The energy bill for the last three months of the previous financial year was $600,000. If the appropriate adjustment was made, it would appear in the Statement of Financial Position as a:
A) $200,000 accrual
B) $200,000 prepayment
C) $400,000 accrual
D) $400,000 prepayment

Question

Quizplus · Accepted Answer

The business has not yet paid its energy bill for the last two months, so it needs to record an accrual for the unpaid amount. Since the bill for three months was $600,000, the bill for two months would be $400,000.

A Business Is Completing Its Financial Records for This Financial