incomes, expenses and adjustments to income and expenses

Question 1

when recording IR, IRIA, EP and PE

Answer 1

accrual basis of accounting states that business activities that have occurred regardless of whether cash is paid or received, should be recorded in the relevant accounting period.

hence expenses and income should be recorded in the financial period they are used or earned, regardless of whether cash is paid or received.

Question 2

journal entries for receiving $xx from other income

Answer 2

dr c.a.b
cr other income

Question 3

journal entries for received at year-end

Answer 3

dr income receivable
cr income

Question 4

journal entries for received in advance at year-end

Answer 4

dr income
cr income received in advance

Question 5

journal entries for closing entry for other income

Answer 5

dr other income
cr income summary

Question 6

journal entries for recording other expenses

Answer 6

dr expenses
cr c.a.b/cash in hand

Question 7

journal entries for expense at year-end

Answer 7

dr prepaid expense
cr expense

Question 8

journal entries for expense payable at year-end

Answer 8

dr expenses
cr expense payable

Question 9

journal entries for closing entry for other expense

Answer 9

dr income summary
cr expense

Question 10

statement of financial position extract

Answer 10

current assets $
—— x

Question 11

statement of financial performance extract

Answer 11

less: other expenses $
—- x

Question 12

EP
PE
IR
IRIA

Answer 12

CL - +
CA + -
CA - +
CL + -