Suppose You Have a Choice of Going Full-Time to Summer

question 34

Multiple Choice

Suppose you have a choice of going full-time to summer school or going to school full-time and working part-time.Summer tuition and books are $2, 200.If you worked part-time, you could make $1, 000.Your rent is $1, 000 for the summer, regardless of your choice.The opportunity cost of going to summer school full-time and not working is, therefore,

• A)$1, 000
• B)$2, 000
• C)$3, 200
• D)$4, 200
• E)cannot be determined from information given

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Definitions:

Completed Contract

An accounting method that recognizes revenue and expenses only when a contract is completed, not progressively over the life of the project.

Installment Method

An accounting method that recognizes revenue and expenses only when payments are actually received or made, typically used in sales with extended payment plans.

Deferred Gross Profit

The portion of gross profit that is earned but not yet recognized, often in installment sales.

Current Liability

A company's debts or obligations that are due within one year, including accounts payable, short-term loans, and other short-term financial obligations.