Question

Why is income received in advance considered to be a personal account?

Answer 1

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When any amount is received by the business firm in exchange of use of the assets of the business firm by other person then it will be called as rent received. The rent is received by the business firm in respect of land and building or machinery or furniture etc. Rent is paid by the third party as per the rent deed made by both parties. It may be received on monthly basis or quarterly basis or half yearly basis or yearly basis. Normally the rent is being received in advance only.