WAEC Accounting 2015 Paper

Concept:Arrears are expenses that have been incurred but not yet paid by the accounting date.Explanation:The electricity payment of GH¢ 60,000 covered 15 monthly installments starting from March 1, 2011.This paid period runs up to May 31, 2012.Monthly electricity expense = $\frac{60{,}000}{15} = \text{GHS}\,4{,}000$.By June 30, 2012, the electricity for June has been used but not yet paid.So, the amount in arrears is exactly one month’s expense.Electricity in arrears = $\text{GH¢}\,4,000$.Answer:D. GH¢ 4,000