BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes
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No
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Detailed explanation-1: -Outstanding rent is the representative personal account because it represents the outstanding expenses to a person. Hence, it is classified as a personal account.
Detailed explanation-2: -Outstanding rent is considered as current liability in accounting. Therefore, it is not an asset. Also read: Outstanding Expenses.
Detailed explanation-3: -Outstanding expenses account is the representative personal account because it represents the outstanding expenses to a group of people. Hence, it can be classified as a personal account.
Detailed explanation-4: -Rent account is a nominal account. Other examples of nominal accounts are wages account, commission account, interest received account. The rule for nominal accounts is: Debit all expenses and losses; Credit all incomes and gains.
Detailed explanation-5: -Outstanding Expenses-Debit or Credit? As mentioned earlier, this outstanding expense is a type of personal account with a credit balance and this is treated as a liability for the business. This is recorded on the liability side of the balance sheet of a business.