Which of the Following Accounts Would Appear in the Income

question 72

Multiple Choice

Which of the following accounts would appear in the Income statement credit column?

• A)Prepaid insurance
• B)Depreciation expense
• C)Service revenue
• D)Unearned service revenue

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of goods produced.

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, salaries, or property taxes, consistent regardless of business activity.

Output

Output refers to the total amount of goods and services produced by a country, company, or economic system.

Average Total Cost

Is calculated by dividing total cost by the quantity of output produced, reflecting the per-unit cost of production.