Accrual AccountingOnline version This quiz was prepared to test the knowledge regarding the identification of differed income, prepayments, receivables and accrued expenses. Select the most appropriate answer in each question. by DESHANI KARUNARATNE 1 A company paid Rs. 24,000 for a insurance premium. However, the insurance premium of the relevant month is Rs. 12,000. This payment should be classified as: a Prepayments - Rs. 12,000 b Receivables - Rs. 12,000 c Differed Income - Rs. 24,000 d Accrued Expenses - Rs. 24,000 2 Salary for the month of December is Rs. 50,000 has not yet been paid at year end. This is recorded as: a Accrued Expenses b Differed Income c Prepayments d Receivables 3 A customer owes the business Rs. 15,000 for goods sold on credit. This is: a Receivables b Prepayments c Differed Income d Accrued Expenses 4 A business receives Rs. 30,000 from a client for services to be provided next month. This amount is classified as: a Differed Income b Receivables c Prepayments d Accrued Expenses 5 A customer paid Rs. 40,000 in advance for services. By year-end, only Rs. 15,000 worth of services has been provided. What is the unearned portion? a Deferred income – Rs. 25,000 b Accounts receivable – Rs. 25,000 c Prepaid expense – Rs. 25,000 d Accrued expense – Rs. 25,000
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