Which of the Following Statements Is TRUE

question 216

Multiple Choice

Which of the following statements is TRUE?

• A) Accounting profit is usually smaller than economic profit.
• B) Unlike implicit costs, explicit costs require monetary outlays.
• C) Knowledge about explicit costs is more useful for making business decisions than knowledge about implicit costs.
• D) Implicit costs equal explicit costs for for-profit firms.

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Definitions:

Payroll Tax Expense

The cost incurred by employers for taxes assessed on employee wages, including social security and medicare taxes.

Payroll Checking

A dedicated bank account used by businesses specifically for managing and issuing payroll to employees.

Contra-Asset

An account on the balance sheet that reduces the value of an associated asset, such as accumulated depreciation.

Payroll Taxes

Fees applied to employers and employees, typically based on a percentage of the salaries paid by employers to their employees.