Asked by Patrick Garland on Jun 25, 2024
Verified
Received six months of rental payments from a tenant.
A) Prepaid expense
B) Accrued expense
C) Unearned revenue
D) Accrued revenue
E) None of these choices
Unearned Revenue
Money received by a company for goods or services that have yet to be delivered or provided.
Rental Payments
Periodic payments made by a lessee to a lessor for the use of a property, equipment, or other asset.
Tenant
A tenant is an individual or entity that occupies land or property rented from a landlord under a lease agreement.
- Recognize and categorize various account types according to commercial transactions.
Verified Answer
BS
Breanna SeawellJun 30, 2024
Final Answer :
C
Explanation :
Receiving rental payments in advance is considered unearned revenue because the service (providing rental space) has not yet been provided for the entire period paid for. The company owes the service for the future months.
Learning Objectives
- Recognize and categorize various account types according to commercial transactions.