Question

What will be the treatment of rent outstanding in accounting equation?

Answer 1

Accounting equation

assets = liability + capital

treatment of rent outstanding

Increase in rent outstanding (liabilities)

Decrease in capital  

As rent is expense its deducted from capital  and

rent outstanding is added in liabilities

Answer 2

Answer:

Rent Outstanding is subtracted from the capital balance and added to liabilities ,Outstanding Rent will be the treatment of rent outstanding in accounting equation.

Explanation:

Rent is an expense for a business, and unpaid rent indicates that it is due and hence a liability that the business must resolve. The capital balance is reduced and liabilities are increased due to the Rent Outstanding. Rent is an expense for a business, and unpaid rent indicates that it is due and hence a liability that the business must resolve. Hence Liabilities are increased and Rent Outstanding is deducted from the capital balance.

$3,00,000 = 1,20,000 + 2,80,000$.

Due to the fact that it represents a person's outstanding expenses, unpaid rent is the representative personal account. Because of this, it is categorized as a personal account.