Rent paid during the year amounted to Rs. 300000, which includes Rs. 20000 relating to the previous year and Rs. 20000 relating to the next year. Rs. 30000 relating to the current year is still outstanding. How much rent will be debited to the profit & Loss account of the current year?
Answers
Answer:
Total Rent to be shown in the profit and loss account
= Rent paid + Outstanding Rent
= Rs. 70,000 + Rs. 20,000
= Rs. 90,000
Explanation:
Rent lease Account approach a depositary account inside the call of a Borrower maintained at a Borrower lease Account bank into which tenants had been instructed to deposit rents, which can also consist of a consolidated account across all debtors, provided that such consolidated account does no longer comprise budget.
accounts referring to profits, revenue, benefit, charges and losses are termed as nominal debts. these accounts are also referred to as fictitious bills as they do no longer constitute any tangible asset. A separate account is maintained for every head or expense or loss and advantage or income. rent account is a nominal account. other examples of nominal money owed are wages account, commission account, hobby received account. the rule of thumb for nominal accounts is: Debit all fees and losses; credit score all earning and gains.
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