Which of the Following Adjusting Entries Would Be the Most $\begin{array}{ll}\text { Depreciation Expense } & 2,000 \\\text { Accumulated Depreciation } & 2,000\end{array}$

question 37

Multiple Choice

Which of the following adjusting entries would be the most likely to be reversed?

• A)
• \(\begin{array}{ll}
• \text { Depreciation Expense } & 2,000 \\
• \text { Accumulated Depreciation } & 2,000
• \end{array}\)
• B)
• Unearned Rent \( \quad 600 \)
• Rent Revenue \( \quad 600 \)
• C)
• \(\begin{array}{cc}
• \text { Insurance Expense } & 200 \\
• \text { Prepaid Insurance } & 200
• \end{array}\)
• D)
• \(\begin{array}{lr}
• \text { Income Tax Expense } & 450 \\
• \text { Income Taxes Payable } &
• \end{array}\)

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Definitions:

Firm's Total Profit

The total income of a firm after subtracting all costs from its total revenues.

Profit Maximizing

The process of adjusting production and sale levels to achieve the highest possible profit based on existing market conditions.

Level of Output

The quantity of goods or services produced by a company, industry, or economy within a given period.

Farmer

An individual engaged in agriculture, raising living organisms for food or raw materials.