Action Real Estate Received a Check for $18,000 on July

question 61

Multiple Choice

Action Real Estate received a check for $18,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent was credited for the full $18,000. Financial statements will be prepared on July 31. Action Real Estate should make the following adjusting entry on July 31:

• A) Debit Unearned Rent, $3,000; Credit Rental Revenue, $3,000.
• B) Debit Rental Revenue, $3,000; Credit Unearned Rent, $3,000.
• C) Debit Unearned Rent, $18,000; Credit Rental Revenue, $18,000.
• D) Debit Cash, $18,000; Credit Rental Revenue, $18,000.

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Definitions:

Safety Inventory

Extra stock kept on hand to prevent stockouts due to variable demand and lead times.

Safety Inventory

Extra inventory kept on hand to protect against uncertainties in demand or supply.

Product Availability

The extent to which goods or services can be purchased or accessed as desired by customers at a given time.

Customer Purchases

Transactions where consumers buy goods or services from businesses, exchanging money for products.