- This topic has 4 replies, 2 voices, and was last updated 8 years ago by
John Moffat.
John Moffat.-
Posts
-
mansoor
- Topics: 424
- Replies: 542
- ☆☆☆☆
a line from a question:
“the balance of 21520 on the rent receivable account has been omitted from the trial balance”
rent receivable is an asset, thus the balance has to be Dr.
therefore we need 21520 dr. thus the correction entry will be:
Dr Rent Receivable 21520
Cr Suspense 21520——————————————–
however, the text says
Dr suspense
Cr Rent rec——————————-
why??
John Moffat
- Topics: 57
- Replies: 50557
- ☆☆☆☆☆
No – rent receivable is income, and is therefore a credit.
(This is a problem with the English that you are going to have to accept, I’m afraid. Usually the word ‘receivable’ does mean that we are owed money, so an asset, so a debit. However the phrase ‘rent receivable’ normally actually means ‘rental income’. I am sorry about that (although its not my fault 🙂 ). The same applies if you see the phrase ‘interest receivable’ – it really means ‘interest income’.)
mansoor
- Topics: 424
- Replies: 542
- ☆☆☆☆
ah….yes of course its not ur fault….:)
thank u sir!
mansoor
- Topics: 424
- Replies: 542
- ☆☆☆☆
related question:
“rent payable” is still a liability account or is it rent expense?
John Moffat
- Topics: 57
- Replies: 50557
- ☆☆☆☆☆
Oh dear 🙁
The problem is that it could be either. Most likely it will mean rent expense but it really depends on the wording of the rest of the question.
mansoor
John Moffat- You must be logged in to reply to this topic.