An entity records all transactions relating to the expense for rent in 20X1. On 1 January 20X1 there was an accrual of £900 in respect of rent. On 31 December 20X1 there was a rent accrual of £1,100. During the year, £4,800 was paid in respect of rent.
The expense for rent for the year appearing the income statement account was:-

Question

Quizplus · Accepted Answer

The expense for rent for the year is calculated by adding the rent paid during the year (£4,800) to the increase in the rent accrual from the beginning to the end of the year (£1,100 - £900 = £200). Therefore, the total rent expense for the year is £4,800 + £200 = £5,000.

An Entity Records All Transactions Relating to the Expense for Rent