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Unearned Rent is rent paid in advance to one company/person from another. Unearned Rent is a liability until it is earned. Unearned rent is "not" closed on an income summary at the end of the fiscal year. Unearned rent is never actually "closed" but actually brought down to a zero balance account.
For example, your company was paid rent for December 2010, and January and February 2011 in the amount of say $15,000 and on December 31, 2010 your fiscal year ends and you are closing your books and the December rent paid to you expires (is used up for December) your entry will be a debit to unearned rent for $5,000 and a credit to Rent Revenue for $5,000. This still leaves a balance of $10,000 in unearned rent for the following year (Jan. and Feb.)
Let's look at another scenario, say you charge $3,000 a month for rent and your company is paid for the full year (Jan.-Dec.) Your first entry to record such a payment is a debit to cash $36,000 and a credit to unearned rent $36,000
As each month expires you remove the amounts in increments of $3,000 until the account balance in unearned rent is zero, then at the end of the accounting period, rent revenue is closed to the income summary, not unearned rent.
What else can I help you with?
Which of the following accounts will be closed to the retained earnings account at the end of the fiscal year?
Income Summary
What account would not be closed to income summary at the end of the fiscal year?
At the end of the fiscal year, permanent accounts, also known as real accounts, are not closed to the Income Summary. These accounts include assets, liabilities, and equity accounts, such as cash, accounts receivable, accounts payable, and retained earnings. Instead, they carry their balances forward into the next accounting period. In contrast, temporary accounts like revenues and expenses are closed to the Income Summary to prepare for the new fiscal year.
What accounts are closed to income summary at the end of the fiscal year?
All Sales and Expense accounts are closed and the balancing figure is shown on the Balance Sheet.
Is Accumulated Depreciation closed to the Income Summary account?
false
What accounts will be closed by debiting the Income Summary?
Depreciation Expense
Which of the following accounts will be closed to the retained earnings account at the end of the fiscal year?
Income Summary
What accounts will be closed to the capital accounts at the end of the fiscal year?
Which of the following accounts will be closed to the Capital account at the end of the fiscal year?
What account would not be closed to income summary at the end of the fiscal year?
At the end of the fiscal year, permanent accounts, also known as real accounts, are not closed to the Income Summary. These accounts include assets, liabilities, and equity accounts, such as cash, accounts receivable, accounts payable, and retained earnings. Instead, they carry their balances forward into the next accounting period. In contrast, temporary accounts like revenues and expenses are closed to the Income Summary to prepare for the new fiscal year.
What accounts are closed to income summary at the end of the fiscal year?
All Sales and Expense accounts are closed and the balancing figure is shown on the Balance Sheet.
What accounts should be closed to income summary at the end of the fiscal?
All revenue and expense accounts should be closed to the income summary account, as shown:Revenue xxIncome Summary xxTo close revenue accounts.Income Summary xExpenses xTo close expense accounts.If the business is a merchandising company, the following transactions must also be recorded.Income Summary xxInventory xxTo close opening inventory.Inventory xxIncome Summary xxTo record ending inventory.Supplies Expense
Why land rent is considered as an Unearned income?
land rent is an unearned income
Is Accumulated Depreciation closed to the Income Summary account?
false
What account is being closed in the income summary?
Accounts receivable
What accounts will be closed by debiting the Income Summary?
Depreciation Expense
Is the account sales returns and allowances closed out to income summary?
It would be closed to this summary. This is because they are considered a form of contra revenue accounts.
What are income transfers?
unearned income
Which account has a balance equal to net income immediately before it is closed?
income summary account.
