The Economic Way of Thinking Has to Do With

question 55

Multiple Choice

The economic way of thinking has to do with:

• A) analyzing benefits but not costs.
• B) analyzing costs but not benefits.
• C) making choices at the margin.
• D) making the distinction between microeconomics and macroeconomics.

---

Definitions:

Net Sales

The net income from goods or services sold, after deducting returns, allowances, and discounts.

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

Earned Revenues

Income a company has generated for goods delivered or services provided, recognized when earned, not necessarily when received.

Incurred Expenses

Expenses that have been recognized in the accounting period when they are incurred, regardless of when the payment is made.