Suppose Eastland College Does Not Have a Summer Program and Could

question 16

Multiple Choice

Suppose Eastland College does not have a summer program and could rent out the campus to various summer sports camps for $100,000.The potential revenue of the summer camps represents a(n) :

• A)implicit cost of capital.
• B)explicit cost.
• C)total cost.
• D)sunk cost.

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Definitions:

Journalized

The act of recording transactions in a company's journal as part of the accounting process.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reflected as an expense in the income statement.

Notes Payable

A liability account listing amounts owed by a company from formal written promises to pay a certain amount in the future.

Prepaid Expense

Prepaid Expense represents payments for goods or services that will be received in the future, recorded as assets until they are consumed or used.