If a Company Has Excess Space in Its Building That

question 30

Multiple Choice

If a company has excess space in its building that it rents to another company for $700,what is the effect on the accounting equation when the first rent payment is collected?

• A)Assets would decrease $700 and liabilities would decrease $700.
• B)Assets would decrease $700 and equity would increase $700.
• C)Assets would increase $700 and equity would decrease $700.
• D)Assets would increase $700 and equity would increase $700.
• E)Liabilities would decrease $700 and equity would increase $700.

---

Definitions:

Muscle

A tissue in animals composed of fibers capable of contracting to effect bodily movement.

Hyaline Cartilage

A type of connective tissue found in various parts of the body such as the nose, trachea, and larynx, characterized by a translucent appearance and providing support with flexibility.

Fibrocartilage

A type of tough, very dense, and fibrous cartilage found in places requiring great tensile strength such as intervertebral discs and the menisci.

Elastic Cartilage

A type of flexible cartilage that contains elastic fibers, enabling structures like the ear and epiglottis to bend and return to their original shape.