Pankaj Limited has an accrual for motor expenses at 1 October 2019. Payments of motor expenses are made regularly during the year. At 30 September 2020, Pankaj Limited has a prepayment of motor expenses. Which one of the following calculations will enable Pankaj Limited to determine the correct motor expenses charge in the statement of profit or loss for the financial year to 30 September 2020?
A) Payments made during the year + accrual at 1 October 2019 + prepayment at 30 September 2020.
B) Payments made during the year + accrual at 1 October 2019 - prepayment at 30 September 2020.
C) Payments made during the year - accrual at 1 October 2019 - prepayment at 30 September 2020.
D) Payments made during the year - accrual at 1 October 2019 + prepayment at 30 September 2020.
Correct Answer:
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