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Adjustment Entry for rent received in advance would be?
By BYJU'S Exam Prep
Updated on: September 25th, 2023
(A) Cash A/c ’ Dr, To Rent Received in Advance A/c
(B) Cash A/c Dr. To Rent A/c
(C) Rent A/c Dr. To Rent Received in Advance A/c
(D) Advance Rent A/c Dr. To Rent A/c
Adjustment Entry for rent received in advance would be Rent A/c Dr. To Rent Received in Advance A/c. Unearned income is compensation that has been obtained in advance. It still needs to be earned and is a part of a future accounting period. The accounting principle of “Credit the rise in obligation” is acknowledged in the journal entry for money received in advance.
Commissions, rent, and other types of revenue are a few examples of income that is received in advance. These advances are viewed as a burden for the company. Journal entry for income received in advance is; Income A/C – Debit the decrease in income.
To income received in advance A/C – Credit the increase in liability. Receiving rent is considered income, and receiving rent in advance means receiving money before it has accrued. The Rent account has been credited at the moment of receiving the rent. Hence an adjustment entry must be made:
Rent Received A/c Dr. To Advance Rent received A/c. The sum will be taken out of the Rent received account and recorded as a liability in the profit and loss account.
Summary:
Adjustment Entry for rent received in advance would be? (A) Cash A/c ’ Dr,To Rent Received in Advance A/c(B) Cash A/c Dr.To Rent A/c(C) Rent A/c Dr.To Rent Received in Advance A/c (D) Advance Rent A/c Dr.To Rent A/c
Adjustment Rent A/c would be the entry for rent that was paid in advance. Dr. To Rent Ac Received Before.
