WAEC Accounting 2015 Paper

Concept:Only the part of the advertising payment that falls within the accounting year ended June 30, 2012 is charged to the profit and loss account.Explanation:The advertising payment of GH¢36,000 covers 12 months ending March 31, 2012.So the period covered is April 1, 2011 to March 31, 2012.The accounting year ends on June 30, 2012.Therefore, the relevant period is July 1, 2011 to June 30, 2012.The months of advertising that fall inside this accounting year are from July 2011 to March 2012.That gives 9 months.Monthly advertising cost is $\frac{36,000}{12} = 3,000$.Amount charged to profit and loss $= 9 \times 3,000 = 27,000$.Answer:GH¢ 27,000