Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Rent received
- This topic has 5 replies, 2 voices, and was last updated 4 years ago by
John Moffat.
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- November 14, 2020 at 1:37 pm #594997
If we are given the opening and closing balances of rent received in advance and rent received in arrears, how do we calculate the rent received for the year?
November 14, 2020 at 3:06 pm #595007If that is all you are given then you cannot calculate either the cash received or the rental income – you need one of them to be able to calculate the other.
Best is to write up a t-account in exactly the same way as we do for for expenses when there are accruals and prepayments.
When it is income as with rent received, the rent received in advance is a credit balance (because the tenant has overpaid) and rent received in arrears is a debt balance (because the tenant is still owing us money).
November 14, 2020 at 7:06 pm #595031Yes sorry I forgot to mention that rent received is mentioned in the question but I don’t understand how to calculate the missing figure when there are closing balances on both sides. I mean the figure that has to be included in the SOPL.
November 15, 2020 at 11:31 am #595081The rent received is credited to the rent account (and debited to cash), and the missing figure is the rental income to appear in the SOPL.
November 15, 2020 at 4:25 pm #595122I understand that but I don’t understand how to find the value of rental income that will appear in the SOPL. I set up the t accounts and balances correctly but I don’t understand what to do after that since there are closing balances on both the debit and credit sides
November 16, 2020 at 7:53 am #595150As I replied before, the missing figure on the account is the figure to appear in the SOPL.
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