Lang Leased a Portion of Its Store to Pang for 12

question 92

Multiple Choice

Lang leased a portion of its store to Pang for 12 months beginning on November 1, at a monthly rate of $400. Pang paid the entire $4,800 on November 1, which Langrecorded as unearned revenue. The journal entry made by Lang at year-end, December31, would include:

• A)A debit to Rent Earned for $400.
• B)A debit to Cash for $800.
• C)A credit to Unearned Rent for $400.
• D)A credit to Rent Earned for $800.
• E)A debit to Unearned Rent for $4,800.

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Definitions:

ROE

Return on Equity evaluates a company's profit generation capacity by showing the amount of profit made from the investment of its shareholders.

EPS

Earnings Per Share, a key financial metric calculating the portion of a company's profit allocated to each outstanding share of common stock.

Economic Climate

The overall state of the economic environment, factoring in aspects like growth rates, employment levels, inflation, and consumer spending.

Financial Leverage

Financial leverage refers to the use of debt (borrowed funds) to amplify the potential returns to shareholders. It increases the potential for both gains and losses.