Which of the Following BEST Describes Relevant Costs

question 48

Multiple Choice

Which of the following BEST describes relevant costs?

• A)present costs with similar decision alternatives
• B)future costs that differ between competing decision alternatives
• C)past costs that correspond solely on competing decision alternatives
• D)present costs that differ between competing decision alternatives

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Definitions:

Prepaid Expenses

Payments made in advance for goods or services that will be used in the future, recorded as assets on the balance sheet until they are consumed.

Accrued Salaries

Salaries that have been incurred (earned by employees) but not yet paid by the employer.

Estimated Depreciation

The projection of an asset’s decrease in value over time due to wear and use, used for accounting and tax purposes.

Fees Collected

Revenue generated from charging for services provided, professional services, or through administrative fees.