Rick rented an office for the business for £6,000 per annum from 1 January 2021 and pays the rental quarterly in arrears. One quarter's rent was owing at the year end.
The double entry for this should be
decrease liability a/c = DEBIT OFFICE RENTAL A/C £1,500
decrease expense a/c = CREDIT ACCRUALs A/C £1,500

Question

Quizplus · Accepted Answer

The entry is correct because it records the expense incurred for the quarter ended 31 December 2021, which is £1,500. The accrual account is credited to reflect the liability for the unpaid rent.

Rick Rented an Office for the Business for £6,000 Per