Journal Entry for Rent paid in cash is: A) Debit Rent A/c, Credit Cash A/c. B) Debit Bank A/c, Credit Rent A/c. C) Debit Cash A/c, Credit Rent A/c. D) None of the options.
Answer (1)
To determine the correct journal entry for 'Rent paid in cash', we need to understand how basic accounting principles work, particularly the double-entry bookkeeping system. In this system, each transaction involves two accounts: one account is debited and another account is credited.
In this scenario:
Debit Rent Account : The rent account is an expense account. When you pay rent, it increases your expenses. According to accounting rules, when an expense increases, it is debited.
Credit Cash Account : The cash account represents your assets. When you pay cash, your cash assets decrease. According to accounting rules, when an asset decreases, it is credited.
Therefore, the correct journal entry for rent paid in cash would be A) Debit Rent A/c, Credit Cash A/c .
This entry ensures that your books reflect the increase in expenses and the corresponding decrease in cash accurately.
