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Why the answer is D?

10) The effect of the year-end adjustment required in respect of rates prepaid is . .

.   

A. to decrease both the rates expense shown in the profit and loss account and the figure shown 

   in the Statement of Financial Position (balance sheet) for prepayments.

B. to decrease the figures shown in the Statement of Financial Position (balance sheet) for both 

   accounts payable and prepayments.

C. to increase the figures shown in the Statement of Financial Position (balance sheet) for both 

   prepayments and accounts payable.

D. to increase the figure shown in the Statement of Financial Position (balance sheet) for 

   prepayments and to decrease the rates expense shown in the profit and loss account.

      

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The correct option is : D. to increase the figure shown in the... View the full answer

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