Jorge Owns a Home That He Rents for 360 Days

question 62

True/False

Jorge owns a home that he rents for 360 days and uses for personal purposes for five days. Jorge is not required to allocate expenses associated with the home between rental and personal use.

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Definitions:

Revenues

Income generated from normal business operations, often from the sale of goods and services to customers.

Expenses

Costs incurred by a business or individual in the process of earning revenue, ranging from utilities to salaries.

Drawing Account

An account used to record withdrawals made by an owner from the business for personal use.

Owner's Capital Account

An equity account that represents the owner's invested capital plus any retained earnings or minus any withdrawals.