Joe Received $5,000 in Advance for Renting Part of His

question 5

Multiple Choice

Joe received $5,000 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
• C)Debit Cash; credit Unearned Rent
• D)Debit Cash; credit Rental Income

---

Definitions:

Real Exchange Rate

The rate at which two currencies can be exchanged, adjusted for inflation, reflecting the actual purchasing power of one currency over another.

Arbitraging

The practice of buying and selling the same asset in different markets to take advantage of differing prices for the same asset.

Foreign Goods

Products or services that are produced outside one's own country and imported for domestic consumption.

Purchasing-power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to determine the relative value of the currencies.