Module 3 Test: Accounting Concepts
Module 3 • 10 Questions
Question 1 of 10
0 of 10 answered
The owner of a business rents a house for Rs. 40,000 a month and uses the front 20% of the floor area to run a retail store. The accountant pays the whole rent from the firm's bank account. How should this be recorded?
A
Rs. 40,000 as rent expense of the business, since the firm's account paid it
B
Rs. 20,000 each to rent expense and drawings, as an equal split between business and personal use
C
Rs. 8,000 as rent expense of the business and Rs. 32,000 as the owner's drawings
D
Rs. 40,000 as the owner's drawings, since the property is the owner's residence