amit agrawal


{ City } jaipur
< Country > india
* Profession * student
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Question { Pepsi, 26873 }

Why do you prepare a Trial Balance?


Answer

Trial balance contains balances of all accounts that may
either be of capital nature or revenue nature and may
either having credit or debit balance. By which we can make
our financial statements by taking balances from trial
balance.
And as every transaction affects two accounts in double
entry system i.e. one is debit and other one is credit so
it reveals any arithmatical mistake in posting and
recording etc.

Is This Answer Correct ?    1 Yes 0 No

Question { IBM, 6951 }

A company closing its acconts in december..its paying
10000/-as rent......in the month of august it paid 4 months
rent as advance...how will u account this


Answer

(Assuming Rent is due on the 1st day of every month.)

In the Month of August (Dr) (Cr)

Prepaid Rent A/c Dr 40000
To Cash/Bank A/c 40000
(When Paid)

(On 1st sept.)
Rent A/c Dr. 10000
Prepaid Rent A/c 10000

(On 1st Oct.)
Rent A/c Dr. 10000
Prepaid Rent A/c 10000

(On 1st Nov.)
Rent A/c Dr. 10000
Prepaid Rent A/c 10000

(On 1st Dec.)
Rent A/c Dr. 10000
Prepaid Rent A/c 10000

Is This Answer Correct ?    2 Yes 0 No