CIMA BA3 · Chapter 9 · Question 4 of 10
A business lets part of its premises. During the year it received rent of $18,200. At the start of the year the tenant had paid $1,400 in advance. At the end of the year the tenant owes $900. What is the rental income for the year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $20,500
Explanation
Rent received in advance at the start is income of this year, so it is added. Rent owed at the end has been earned but not yet received, so it is also added. Income = $18,200 + $1,400 + $900 = $20,500.
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