Which of the Following Pairs of Accounts Could Not Appear

question 132

Multiple Choice

Which of the following pairs of accounts could not appear in the same adjusting entry?

• A) Service Revenue and Unearned Revenue
• B) Interest Income and Interest Expense
• C) Rent Expense and Prepaid Rent
• D) Salaries Payable and Salaries Expense

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Definitions:

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the cushion a business has before it incurs a loss.

Operating Leverage

A measure of how sensitive net operating income is to a given percentage change in dollar sales.

Net Operating Income

The income derived from a firm's core business operations, not including taxes and interest expenses.