Orleans Co., a cash-basis taxpayer, prepares accrual basis financial statements. In its year 2 balance sheet, Orleans?

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Question:

Orleans Co., a cash-basis taxpayer, prepares accrual basis
financial statements. In its year 2 balance sheet, Orleans? deferred
income tax liabilities increased compared to year 1. Which
of the following changes would cause this increase in deferred
income tax liabilities?

I. An increase in prepaid insurance.

II. An increase in rent receivable.

III. An increase in warranty obligations.

I only.
I and II.
II and III.
III only.