Rent revenue collected 1 month in advance should be accounted for as: a. revenue in the month collectedb. a current liability for deferred revenuec. a separate item in shareholders' equityd. an accrued liability

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A: The revenues and expenses are recognised in the period when they are incurred.

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Q: Accounting Question

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Q: Rent revenue collected 1 month in advance should be                    accounted for as:         a.…

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A: The correct answer is (d).

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A: Revenue: It is the Income generated by any organization from the regular course of business…

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A: Given,  Prepaid rent on December 31 = $26,100

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.