WAEC Accounting 2016 Paper

Concept:Prepaid rent is an asset that must be adjusted while calculating the actual rent expense for the year.Explanation:Rent chargeable for 2014 is found using the formula:$\text{Rent for 2014} = \text{Opening prepaid rent} + \text{Rent paid during the year} - \text{Closing prepaid rent}$Opening prepaid rent on 1/01/2014 is $\mathrm{N}600$, which relates to 2014, so it is added.Rent paid on 31/12/2014 is $\mathrm{N}3{,}000$.Closing prepaid rent on 31/12/2014 is $\mathrm{N}400$, which relates to 2015, so it is subtracted.Thus, rent chargeable = $600 + 3{,}000 - 400 = 3{,}200$.Answer:Rent for 2014 chargeable to the profit and loss account is $\mathrm{N}3{,}200$.Option C.