rent outstanding is added to the rent a/c is which type of accounting concept
Answers
Answer:
Accounts recording transactions with a person or group of persons are known as personal accounts. These accounts are necessary, in particular, to record credit transactions. Personal accounts are of the following types:
1. Natural person: An account recording transactions with an individual ks termed as a natural persons' personal account. For e.g. Kamal's account, Mala's account. Both males and females are included in it.
2. Artificial or legal persons: An account recording financial transactions with an artificial person created y law or otherwise is termed as an artificial persons' personal account. For e.g. Firms' accounts, limited companies' accounts.
3. Representative personal accounts: An account indirectly representing a person or persons is known as representative personal account. When accounts are of similar nature and their number is large, it is better to group them under one head and open a representative personal account. For e.g. prepaid insurance, outstanding salaries, etc.
Outstanding rent is the representative personal account because it represents the outstanding expenses to a person. Hence, it is classified as a personal account.
Explanation:
Answer:
Outstanding rent is the representative personal account because it represents the outstanding expenses to a person. Hence, it is classified as a personal account.