If the rent received in advance 2,000. The adjustment entry will be ________.

debit profit and loss account and credit rent account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

debit rent account credit rent received in advance account

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

debit rent received in advance account and credit rent account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

none of the above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B debit rent account credit rent received in advance account
Rent received is an income and rent received in advance means income not accrued but received in advance.
At the time of receiving the rent, Rent account has credited, hence an adjustment entry need to be passed:

Rent Received A/c Dr.
To Advance Rent received A/c

In profit & loss account, amount will be deducted from Rent received account and to be shown as liability.

Suggest Corrections

Similar questions

Prepare a Trading and Profit and loss account for year ending December 31, 2010 from the balances extracted to M/s Rahul Sons. Also prepare a balance sheet at the end of the year.

$\begin{matrix} Account Title & Amt. (Rs.) & Account Title & Amt.(Rs) Opening Stock & 50, 000 & Sales & 1, 80, 000 Wages & 3, 000 & Purchase Return & 2, 000 Salary & 8, 000 & Discount Received & 500 Purchase & 1, 75, 000 & Provision for Bad Debts & 2, 500 Sales Return & 3, 000 & Capital & 3, 00, 000 Sundry Debtors & 82, 000 & Bills Payable & 22, 000 Discount Allowed & 1, 000 & Commission Received & 4, 000 Insurance & 3, 200 & Rent & 6, 000 Rent, Rates and Taxes & 4, 300 & Loan & 34, 800 Fixtures and Fittings & 20, 000 Trade Expenses & 1, 500 Bad Debts & 2, 000 Drawings & 32, 000 Repair and Renewals & 1, 600 Travelling Expenses & 4, 200 Postage & 300 Telegram Expenses & 200 Legal Fees & 500 Bills Receivable & 50, 000 Building & 1, 10, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 5, 51, 800 - -------- - - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 5, 51, 800 - -------- - - -------- - \end{matrix}$

Adjustments:

1. Commission received in advance Rs. 1,000.

2. Rent received Rs. 2,000.

3. Salary outstanding Rs. 1,000 and insurance prepaid Rs. 800.

4. Further bad debts Rs. 1,000 and provision for bad debts @5% on debtors and discount on debtors @ 2%.

5. Closing stock Rs. 32,000.

6. Depreciation on building @ 6% pa.

Q. Classify the following accounts under personal, real or nominal accounts:

(i) Commission Paid	(ii) Commission Received
(iii) Commission Accrued	(iv) Prepaid Salaries
(v) Leasehold Property A/c	(vi) Discount Allowed
(vii) Carriage Inwards A/c	(viii) Life Insurance Corporation of India
(ix) Drawings A/c	(x) Rent Received in Advance
(xi) Debtors	(xii) Sales A/c
(xii) Rent Paid in Advance	(xiv) Bank Overdraft

Q. An institution received Rs. 1,80,000 as rent during the year 2016-2017 which includes Rs. 36,000 received in advance for the year 2017-2018.Outstanding rent at the end of the years 2015-2016 and 2016-2017 were Rs. 24,000 and Rs. 28,000 respectively. Amount of rent to be shown in Income and Expenditure Account for the year 2016-2017 will be ____________.

At the start of the year, the balance sheet contained a balance for rent received in advance of Rs. 1,000. Rs. 15,000 was received throughout the year and at the year end, it was clear that Rs. 2,000 was still receivable for the year. Which of the following is the correct entry in the profit and loss account?

Parth has an accounting year ending on 31st March. He receives rent quarterly in advance amounting Rs. 45,000 on 1 January, 1 April, 1 July and 1 October but for the current year, he received the rent on 31st March instead for 1st April. What shall be the amount of rental income to be recorded in the profit & loss account for the year?

Join BYJU'S Learning Program