CIMA Exam CIMAPRA17-BA3-1 Topic 3 Question 109 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 109
Topic #: 3

On 1 March, a company made a payment of $6,000, in respect of rent for the quarter 1 March - 31 May. The company's year end was 31 March.

What will be the amount of the prepayment shown in the accounts at the year end?

A$2,000

B$4,000

C$6,000

DNil

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Suggested Answer: A

by Natalie at Mar 22, 2025, 07:42 PM

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Tresa

1 months ago

Oh, this is a tricky one! I'm going to have to go with B) $4,000 and hope I'm not 'rent'ing a spot in the wrong column.

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Leota

12 days ago

User 2: I'm going with B) $4,000

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Nicolette

15 days ago

User 1: I think it's A) $2,000

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Herman

2 months ago

I'm leaning towards A) $2,000. Since the payment covers three months, and the year-end is on the first month, only one-third of the payment should be prepaid.

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Merri

2 days ago

Actually, the correct answer is A) $2,000. Only one-third of the payment should be prepaid at the year end.

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Sarah

3 days ago

I agree with you, it should be B) $4,000. That makes sense.

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Reyes

4 days ago

I think it would be B) $4,000. Since the payment covers three months, and the year-end is on the first month, two-thirds of the payment should be prepaid.

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Alex

2 months ago

I'm going with C) $6,000. The company made a payment of $6,000, so that's the amount that should be shown as a prepayment in the accounts at the year-end.

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Allene

12 days ago

I'm not sure, but I think it might be A) $2,000. The prepayment amount should only cover the rent for the period after the year end.

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Gayla

1 months ago

I agree with you, it should be B) $4,000. The remaining month of rent should be expensed in the current year, not shown as a prepayment.

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Fannie

1 months ago

I think it's B) $4,000. The payment made on 1 March covers rent for the quarter 1 March - 31 May, so only 2 out of the 3 months are within the year end.

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Iluminada

2 months ago

I'm pretty sure the answer is D) Nil. The entire $6,000 payment should be recognized as an expense for the year, since the year-end is 31 March.

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Lashandra

2 months ago

Hmm, I think the correct answer is B) $4,000. The company made a payment of $6,000 for the quarter, but since the year-end is 31 March, only two-thirds of the payment will be prepaid.

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