Max Received $6,000 in Advance for Renting Part of His

question 46

Multiple Choice

Max received $6,000 in advance for renting part of his building.What is the entry to record the receipt of payment?

• A)Debit Cash;credit Rent Expense
• B)Debit Cash;credit Prepaid Rent Expense
• C)Debit Cash;credit Unearned Rent Revenue
• D)Debit Cash;credit Rental Income

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Definitions:

Marginal Cost

The cost increase from producing a further unit of a product or service.

Long-Run Equilibrium

Long-run equilibrium occurs in a market when all firms earn normal profits, and no new firms have an incentive to enter or exit, resulting in market stability over time.

Average Total Cost

The cost of producing each unit, calculated by dividing the overall production expenses by the quantity of units manufactured.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, factoring in the cost of opportunity.