A Transaction in Which Six Months' Rent Is Paid in Advance

question 48

Multiple Choice

A transaction in which six months' rent is paid in advance. Which of the following journal entries records the transaction?

• A) Prepaid Rent - Debit; Cash - Credit
• B) Rent Receivable - Debit; Cash - Credit
• C) Rent Revenue - Debit; Cash - Credit
• D) Rent Expense- Debit; Cash - Credit

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Definitions:

Door-In-The-Face

A persuasion technique where a large, unreasonable request is made first, followed by a smaller, more reasonable request.

Lowballing

A sales and negotiation tactic where an initial, lower price is offered to entice a buyer, before it is subsequently raised once the buyer is interested or committed.

Mere Exposure

A mental effect where individuals grow fond of things simply because they are accustomed to them.

Reciprocal Helping

A cooperative behavior where an individual helps another with the expectation that the favor will be returned in the future.