The Opportunity Cost of an Action

question 33

Multiple Choice

The opportunity cost of an action:

• A) can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action.
• B) can be determined by adding up the bills incurred as a result of the action.
• C) can be objectively determined only by economists.
• D) is a subjective valuation that can be determined only by the individual who chooses the action.

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Definitions:

Contra Asset Account

This is an account used in financial accounting to offset the balance of a related asset account, increasing the overall accuracy of the company's financial statement.

Accumulated Depreciation

The sum of all depreciation expenses allocated for a physical asset from the time it was first utilized.

Depreciation Expense

The systematic write-off of the cost of a tangible asset over its useful life.

Intangibles

Assets that lack physical substance but are nonetheless valuable to a company, such as patents, trademarks, goodwill, and copyrights.