Anonymous
Anonymous asked in Business & FinanceSmall Business · 8 years ago

Accounting: will this go under net worth or liabilties?

I am gonna do the 1st one for you (cos they gave it to me)

1. Effeect - +17500 (bank) Reason: bank increase Equipment - N/A - Liabilities N/A - Net worth +17500 (bank decrese)

2. Paid rent to Bruma properties now where will this go I know it will go into bank, but what else?

1 Answer

Relevance
  • 8 years ago
    Favorite Answer

    Rent is a fixed overhead item. Has nothing to do with assets (what you own) or liabilities (what you owe) or the difference between the two (Net Worth).

    In GAAP (Generally Accepted Accounting Practices) a payment for rent would normally DEBIT (decrease) a cash or other bank account and CREDIT (increase) a G&A Expense (General and Administrative expense) account. Hope this helps

    Source(s): Been in business for 35+ yrs.
    • Login to reply the answers
Still have questions? Get your answers by asking now.