Accounting Online Program Certification Practice Test

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Prepare for the Accounting Online Program Certification Test. Use flashcards and multiple choice questions with detailed explanations. Ace your accounting certification exam with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What amount of rental income should be recognized in the statement of profit or loss for the year ended 31 July 2008?

£800,000
£810,000
£813,100
£820,000

The correct answer is: £813,100

To determine the correct amount of rental income to be recognized in the statement of profit or loss for the year ended 31 July 2008, it's essential to analyze the rental agreements and accounting policies in effect. If £813,100 is selected as the rental income, it implies that this amount has been calculated based on the accrual accounting principles, which may incorporate all revenue earned for the period, regardless of when cash was received. This means that the income may include not only rents received but also the recognition of any rental income that’s earned but not yet collected, consistent with the matching principle of accounting. This figure also likely reflects periods of rental agreements that align with the financial year in question, considering if there have been any adjustments for non-operational periods, or discounts, guarantees, or incentives provided to tenants that could impact total recognized income for that period. In contrast, the other figures presented may not align with the recognized revenue according to these standards, possibly omitting some rental income that was due or miscalculating the amounts based on cash transactions only.