What is prepaid rent explain with example, Accounting Basics

Assignment Help:

Q. What is Prepaid rent explain with example?

Prepaid rent Prepaid rent is another instance of the gradual consumption of a previously recorded asset. Suppose a company pays rent in advance to cover more than one accounting period. On the date it compensate the rent the company debits the prepayment to the Prepaid Rent account (an asset account). The company hasn't yet received benefits resulting from this expenditure. Therefore the expenditure creates an asset.

We measure rent expense likewise to insurance expense. Usually the rental contract specifies the amount of rent per unit of time if the prepayment covers a three-month rental we charge one-third of this rental to each month. Become aware of that the amount charged is the same each month even though some months have more days than other months.


Related Discussions:- What is prepaid rent explain with example

Final accounts, stpes to be taken prepaing for final accounts

stpes to be taken prepaing for final accounts

What is deferred profit, A portion of company profits allocated by an emplo...

A portion of company profits allocated by an employer, in good years, to an employee's trust.Contributions on behalf of every employee are expressed as a percentage of salary with

Accounting, i have to make a journal and ledger and retained earning all of...

i have to make a journal and ledger and retained earning all of those thing can i get help

What is fob shipping point, Q. What is FOB shipping point? FOB shipping...

Q. What is FOB shipping point? FOB shipping point signifies free on board at shipping point. The buyer acquires all transportation costs after the merchandise has been loaded o

A physical inventory on december 31 shows 2, a physical inventory on decemb...

a physical inventory on december 31 shows 2,000 units on hand. holliday sells the units for $12 each. the company has an effective tax rate of 20%. holliday uses the periodic inv

Enumerate the fundamentals of financial accounting, Enumerate the fundament...

Enumerate the fundamentals of financial accounting information Frame works and principles which have been developed try to address fundamental questions like: ?Who are user

Measurement in financial statements, Q. Measurement in financial statements...

Q. Measurement in financial statements? In December 1984 the FASB issued Statement of Financial Accounting Concepts No. 5 The Recognition and Measurement in Financial Statement

accounts receivable for small busines, How vital does Accounts receivable ...

How vital does Accounts receivable for small business and why?        Ans) Accounts Receivables help small businesses by giving short-term liquidity. Also continued sales on cre

Accounting equation, Definite the meaning of accounting equation

Definite the meaning of accounting equation

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd