rent is an expense while outstanding rent is a liability
Rent expense has a debit balance as a normal balance so increase in rent will be shown by debit to rent expense.
Prepaid rent is an asset and represents and advance payment for a future benefit Rent expense is an expense and is the expended portion of the rent consumed.
If rent is paid for any activity which is directly related with the primary business activity then rent is not other expense, but if rent is paid for activity which is not directly related to primary business activity then it is other expense.
A fixed expense is an expense that doesn't change, regardless of the activity level. For most companies, rent expense is fixed. No matter what the company's sales volume, rent expense stays the same.
rent is an expense while outstanding rent is a liability
Rent expense has a debit balance as a normal balance so increase in rent will be shown by debit to rent expense.
Prepaid rent is an asset and represents and advance payment for a future benefit Rent expense is an expense and is the expended portion of the rent consumed.
If rent is paid for any activity which is directly related with the primary business activity then rent is not other expense, but if rent is paid for activity which is not directly related to primary business activity then it is other expense.
Debit Rent Expense xxxx Credit Rent payable / cash /bank xxxx
As all expenses has debit balance as normal balance and rent is also expense then rent expense also has debit balance and shown in income statement as a reduction from revenue.
A fixed expense is an expense that doesn't change, regardless of the activity level. For most companies, rent expense is fixed. No matter what the company's sales volume, rent expense stays the same.
As all expenses has debit balance as normal balance and rent is also expense then rent expense also has debit balance and shown in income statement as a reduction from revenue.
Yes normally rent is fixed expense and need to be paid even there is no production at all.
How to correct misclassification of rent expense? It was recorded as rent expense, should have been recorded as prepaid rent with an effective tax rate of 30%.
Dr Rent Expense Cr Accrued Rent Expense (L) (Rent Due) then Dr Accrued Rent Expense (L) Cr Bank (When it is paid)
rent expense