Asked by
TACN-2M-19ACN Nguyen Thi Thu Hien
on Oct 28, 2024
Verified
A company's unearned rental revenue account increased from the beginning to the end of the year.In the statement of cash flows using the direct method, the cash collected from tenants would be
A) rent revenue plus unearned rent revenue at the beginning of the year
B) rent revenue plus the increase in unearned rent revenue during the year
C) rent revenue minus the increase in unearned rent revenue during the year
D) equal to rental revenue on the income statement
Unearned Rental Revenue
Income received from tenant payments before the rental period has occurred, recorded as a liability until earned through the passage of time.
Rent Revenue
Income generated from leasing out property or equipment to another party.
Direct Method
A way of presenting a cash flow statement where actual cash flows from operating activities are disclosed directly.
- Determine the effects of balance sheet account alterations on cash flow.
- Compute the net cash generated or expended through operational, investment, and financial activities.
Verified Answer
1A
Learning Objectives
- Determine the effects of balance sheet account alterations on cash flow.
- Compute the net cash generated or expended through operational, investment, and financial activities.