Should "rent security deposit" record as asset or operating expenses?
Answer:
actually the entry should be
dr cash
cr liability - rent security deposit
this should not affect the income statement, its a liability until the renter leaves and the deposit is either handed back or used to offset expenses of the renter to bring the apat back to original condition
hmm operating because you have to have a security deposit in order to live der right so its more as an operating expense
It's a current asset if your expecting it back within a year or a non current asset if your expecting back after a year.
deposits receivable - debit
cash - credit
When you get it back
cash - debit
deposits receivable - credit
If you lose it
deposit expense - debit
deposits receivable - credit
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