I am busy revising for an exam in Introduction To Financial Accounting which I have tomorrow night! I managed to fluke the last test by only getting one question wrong but I can't rely on luck for this one!!
I have come across a problem! I'm not sure how the lecturer has come to the answer given. He is not around at the moment and neither is the tutor so I'm wondering if any of you nice hexus users can help!!
The question is:
Neil commenced business 1st May 2000 and is charged rent at a rate of £6,000 per annum. During the period to 31st December 2000, he actually paid £4,600. What should his charge in the profits and loss account be in respect of rent?
The answer given is:
£4,000
Can anyone explain why this is so?
Many thanks


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