1. TJae ltd. financial year ended on 31 December 2019. The entity incurs the same electricity expense each month. The last invoice paid for electricity calls was $2,400 on November 01, 2019. This invoice covered the three months to 31 January 2020. What adjustment is required when preparing the accounts for the year to 31 December 2019?

• A. A prepayment of $ 800
• B. An accrual of $ 1,400
• C. An accrual of $ 800
• D. A prepayment of $ 1,400

2. A company using the accrual basis of accounting pays $18,000 for a television advertising campaign in December. Commercials will run evenly in December, January, and February. How much expense will be reported on an income statement prepared for the year ending December 31?

• A. $0
• B. $6,000
• C. $12,000
• D. $18,000

3. The net book value of an asset at the beginning of the year was $23,000. The equipment originally cost $32,000. Depreciation expense for the year was $9,000. The net book value of the asset at the end of the year is:

• A. $19,000
• B. $17,000
• C. $14,000
• D. $ 9,000