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2 November, 12:56

If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit

(A) Prepaid Rent.

(B) Rent Revenue.

(C) Unearned Rent Revenue.

(D) Cash.

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Answers (1)
  1. 2 November, 15:12
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    The correct answer is letter "C": Unearned Rent Revenue.

    Explanation:

    Unearned Revenues are advance payments that a company or individual receives for products and services that it has not yet manufactured or delivered. Unearned Revenue is also called advance payments or deferred revenue. On the company's Balance Sheet, unearned revenue is reported as a liability because it constitutes a debt owed to a client.

    Thus, if a company receives rent payment in advance, the amount received will be recorded as a credit to Unearned Rent Revenue.
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Home » Business » If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit (A) Prepaid Rent. (B) Rent Revenue. (C) Unearned Rent Revenue. (D) Cash.
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