Hank's Tax Planning Service Started Business in January 2013

question 21

Multiple Choice

Hank's Tax Planning Service started business in January 2013. He rented an office for $900 a month starting 1 January. He prepaid the rentals up to 30 June. He makes accrual adjustments monthly. As of 30 April, Hank's ledger shows a balance in Prepaid Rent of how much?

• A)$900
• B)$2 700
• C)$5 400
• D)$1 800

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Definitions:

Demand Curve

a graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing to buy.

Cost Functions

Mathematical relationships expressing the cost of production as a function of the quantity of output produced.

Profit-maximizing

A strategy or point where a firm reaches the highest possible profit by balancing its costs and revenues.

Perfect Competition

A market structure characterized by many buyers and sellers, homogenous products, and free entry and exit from the market.