Rental receipts for the period July 1, 2010, through June 30, 2011, were collected on June 30, 2010.The effects of these economic events on the 2010 financial statements for unearned revenue and rent revenue are $\begin{array}{ll}
&\text { Unearned Revenue } & \text { Rent Revenue } \
\hline I.&\text { Increase } & \text { Increase } \
II.&\text { Increase } & \text { Decrease } \
III.&\text { Decrease } & \text { No effect } \
IV.&\text { Decrease } & \text { Increase }
\end{array}$

Question

Quizplus · Accepted Answer

When rental receipts are collected in advance (on June 30, 2010, for the period July 1, 2010, through June 30, 2011), it increases Unearned Revenue because the service (rental period) has not yet been provided. Rent Revenue also increases as the period for which the rent is applicable begins (starting July 1, 2010), and revenue is recognized over the rental period.

Rental Receipts for the Period July 1, 2010, Through June