KEEP CALM AND WA2 (3E) PART 3

NOT an asset

• PREPAID rental expense

• commission income RECEIVABLE

• cash in hand

• trade PAYABLE

rental income RECEIVED IN ADVANCE

• current ASSET

• current

  LIABILITY

cash PAID - PREPAID = expenses INCURRED

• True

• False

NOT a liability

• rent expense PAYABLE

• trade

  PAYABLE

• rental income RECEIVABLE

• commission income RECEIVED IN ADVANCE

cash RECEIVED - received in advance = income EARNED

• TRUE

• FALSE

cash RECEIVED - RECEIVABLE = income EARNED

• TRUE

• FALSE

REVERSAL entry for BEGINNING PREPAID rental expense

• DR rental expenses

• CR rental expense

Owner took out goods for own use.

• drawings INCREASE

• drawings DECREASE

when cash is RECEIVED for rental income

• DR rental income

  CR cash at bank

• DR cash at bank

  CR rental income

CLOSING entry for rental income

• DR income summary

  CR rental income

• DR rental income

  CR income summary