Implicit Costs

question 42

Multiple Choice

Implicit costs

• A) are always fixed.
• B) appear in the calculation of accounting profit.
• C) measure the forgone opportunities of the owners of the business.
• D) always exceed explicit costs.
• E) are irrelevant to business decisions.

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Definitions:

Selling Goods on Account

The process of selling merchandise to a buyer where payment is to be made at a future date as agreed.

Market Share

The percentage of an industry's total sales that is earned by a particular company over a specified time period.

Revenues

Revenues are the total amount of money generated by a company from its business activities, like sales of goods and services, before any costs or expenses are deducted.

Costs Incurred

Expenses that a company has recognized or recorded, reflecting amounts spent on operations, projects, or activities.