Question

Rs. 500 paid for rent is debited to Landlord's Account’. For the above error, what is the rectification entry?
1. Rent A/c Debit 500 To Landlord's Personal A/c 500 
2. Landlord's Personal A/c Debit 500 Rent A/c Debit 500 To Bank A/c 1,000
3. Rent A/c Debit 500 To Bank A/c 5000
4. Rent A/c Debit 1,000 To Landlord's Personal A/c 1,000

Answer 1

Correct Answer - Option 1 : Rent A/c Debit 500 To Landlord's Personal A/c 500 

The correct answer is Rent A/c Dr. 500 To Landlord's Personal A/c 500 

Rent A/c: Rent account records the expenses incurred for occupying or using the rental property to carry out the business. It is considered as one of the operating expenses of the business. Rent A/c is classified as a Nominal Account.

Landlord's A/c: Landlord's A/c records all the amount owed to the landlord. It is a Personal Account.

Three Golden Rules

• Personal Account - debit the receiver, credit the giver
• Real Account - debit what comes in, credit what goes out
• Nominal Account - debit all the expenses and losses, credit all the incomes and gains

Since, Rent is an expense of the business in process of carrying out the business activity, it must be debited to Rent A/c.

Instead of debiting the Rent A/c, the Landlord's A/c has been debited, so to neutralise the effect of Landlord's A/c, it must be credited with Rs. 500 and Rent A/c must be debited with Rs. 500.

Incorrect entry that has been passed: 

Particulars	Amount Dr.	Amount Cr.
Landlord's A/c                       Dr	500
To Cash/Bank A/c		500

 

Correct entry that should have been passed: 

Particulars	Amount Dr.	Amount Cr.
Rent A/c                               Dr	500
To Cash/Bank A/c		500

 

Rectifying Entry:

Particulars	Amount Dr.	Amount Cr.
Rent A/c                               Dr	500
To Landlord's A/c		500