Which of the Following Accounts Could Decrease as a Result

question 1

Multiple Choice

Which of the following accounts could decrease as a result of adjusting entries?

• A)Prepaid Insurance.
• B)Accumulated Depreciation-Buildings.
• C)Rent Expense.
• D)Service Revenue.

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Definitions:

Marginal Cost

The additional cost incurred from making one more unit of a good or service.

Optimal-output

The level of production that maximizes a firm's profit, where marginal cost equals marginal revenue.

Break-even

The point at which cost or expenses and revenue are equal, resulting in neither profit nor loss.

Long-run Equilibrium

A state in which all factors of production and costs are variable, and firms are making neither excess profits nor losses.