How Are Money Cost and Opportunity Cost Related to Each

question 100

Multiple Choice

How are money cost and opportunity cost related to each other?

• A)If markets function well, they are closely related.
• B)They are always identical in any economic system.
• C)Opportunity cost always exceeds money cost.
• D)Money cost is less than or equal to opportunity cost.
• E)In a market economy, they are always equal to each other.

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Definitions:

Business Entity Concept

An accounting principle that treats a business as separate from its owners, requiring separate recording of business transactions.

Cost Concept

An accounting principle that states assets and services should be recorded and based on their original cost at the time of acquisition.

Unit of Measure Concept

An accounting principle that states transactions should be recorded in a single, consistent currency unit for accuracy and comparability.

Objectivity Concept

A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.