0
Rent expense is considered an overhead cost, not a cost of sales since it does not directly relate to the merchandise you are selling. Any prepaid rent (such as at the beginning of the month) should receive a journal entry debit to an account called prepaid rent, and at the end of the month should be credited to rent expense. Hope this helps.
Add your answer:
Earn +20 pts
What is a deferred rent payable?
Deferred rent payable is the sum of the difference between a monthly rent payment and the monthly rent expense of an operating lease that contains escalated payments in future periods. The rent expense is the sum of all rent payments over the term of the lease divided by the number of periods contained in the lease otherwise known as straight-line amortization. This rent expense amount can/may differ from the monthly rent payments. The difference is deferred rent payable.
What does step rent mean?
Step rent is where you take the rental expense over the life of the leased asset and you amortize on a straight line basis. For example, if you are paying 10,000 a year for 20 years and then the rent goes up to 20,000 for another 20 years, then with straightlining that expense your rent expense would be 15,000 (600,000 total rent/480 months (12 months * 40 years). You incur additional expense the first 20 years and then the next 20 years you have the offset. After 40 years the expense is the same.
What is the average cost for rent one bedroom apartment in san antonio?
$100 is the average cost of rent for a one bedroom apartment in San antonio.
Define no rent land?
No rent land is defined as land which cannot be rented to others. This may be part of the original sales agreement or other legal limitations.
How much does it cost to rent a bulldozer?
approx $250.
Is sales commission an expense or cost of sales?
Sales commission is a Cost of sales. But the salary of a sales agent is an expense.
What is a fixed 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.
What accounts can be found in income statement?
Accounts found on an Income Statement are : Cost of Sales, Sales Rev., Selling Expense and Wage Expense
Is rent expense a liability?
rent is an expense while outstanding rent is a liability
What is a selling expense?
A selling expense is an expenditure made in support of the sales effort. This might include advertising, cost of transportation for sales personnel, printing of sales and technical brochures, etc.
Is an increase in rent expense a credit?
Rent expense has a debit balance as a normal balance so increase in rent will be shown by debit to rent expense.
What is the difference between prepaid rent and 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.
What is a flexible budget?
Definition A set of revenue and expense projections at various production or sales volumes. The cost allowances for each expense are able to vary as sales or production vary.
Is rent expense an other expense?
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.
What the difference between expense and prepaid expense with example?
Expense is any cost that the firm incurs to earn the particular revenue. Most expense are required to be paid except for a few "non-cash expense" such as depreciation. Prepaid, as suggested, are expenses paid in advance but have not yet "used" to generate revenue. It is to be used at a later date. One example of a prepaid expense would be rent i.e. prepaid rent. The owner pays the rent for the next 2 months at $100 per month. Prepaid rent = $200.
How is rent expense properly recorded?
Debit Rent Expense xxxx Credit Rent payable / cash /bank xxxx
Is rent considered a SGA expense?
SG&A expenses are sales, general, and administrative expenses. They are company overhead costs that include recurring expenses like rent, office supplies, and salaries.
