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SSC Financial and Cost Accounting P-1 QUESTION #6141
Question 1

A sole trader rented out office space from 1 January 2024 at $500/month for 24 months. During year ended 31 December 2024, he received rent $5,500 and refundable deposit $500. What appears in the statement of financial position at 31 December 2024?

OptionCurrent AssetsCurrent Liabilities
Anil$500
B$500nil
C$500$500
D$1,000nil
  • Option A
  • Option B
  • Option C✔️
  • Option D
Correct Answer Explanation

Option C is correct.

Current asset: Annual rent = 12 × $500 = $6,000; Received $5,500; Accrued = $500.

Current liability: The $500 deposit must be returned to the tenant — it is not income, it is a liability owed to the tenant = $500.