nnのCPA試験の旅 in Hawaii CPA試験の旅 in Hawaii

Hello again!

by nn_77
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タグ:Rent revenue ( 1 ) タグの人気記事

I completely recovered from the cold. To my relief, the cold didn’t linger that long.

Today, coming to the office, I processed all the documents and necessary html related tasks on full blast so that I can leave the office on time and get started studying at the Anjo school for USCPA exam preparation.
I managed to process all of my assignments of the day, until I was about to leave the office. When I got through the final procedure on my PC display and was about to shut down Windows OS, an unexpected man-made calamity, which was driven by an innocent senior staff, assaulted me! (Don’t take it that serious; this is a kind of metaphor, of course.)

Due to the accident, I had to stay at the office one and a half hours longer than I expected. So I gave up visiting Anjo and made it straight back home. Actually, studying at home is more effective because I have a lot of textbooks and reference books at hand, while I have only some excerpts of Willey in my bag when I’m out. Yet I’d prefer to visit Anjo because I could easily give in to my weakness when I do it at home.

But today I had to study at home because I had no time to visit Anjo. On my way back home, I determined to study, study, STUDY, STUDY in mind.

And, so did I. I was happy when I finished in the morning. I’ve gotta keep it from now on, too.

After reviewing the TAX part, I noticed that I had been misunderstanding the accounting treatment of RENT REVENUE.

My (incorrect) understanding till today was that all rent received in the current period should be included in the taxable income of the period as is processed in the cash basis accounting.

But the true rule is that how much portion of the rent received during this period should be determined depending on whether the taxpayer uses the accrual basis or the cash basis in his/her tax return. If it’s based on the cash basis, then all the rent received in the year should be reported in the taxable income of the period. But if it’s on the accrual basis, then the rent received should be allocated so as to match the period of the rent earned.

The point is that the RENT RECEIVED IN ADVANCE (including the nonrefundable deposit) should be included in the taxable income of the period when it received, REGARDLESSof whether it’s on the cash basis or on the accrual basis. I had been confused with this point for a long time. Now it’s clear to me, which is a part of my progress today.
by nn_77 | 2006-01-10 12:02 | >REG | Comments(0)