Select the Correct Statement Regarding Opportunity Costs

question 100

Multiple Choice

Select the correct statement regarding opportunity costs.

• A) Opportunity costs need not be considered in decision making.
• B) Opportunity costs are not recorded in a firm's financial accounting records.
• C) Opportunity costs represent sunk costs.
• D) All of these answers are correct.

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Definitions:

Service Contract

An agreement between a customer and a service provider detailing the terms of service delivery, including scope, quality, and responsibilities.

Adjusting Journal Entry

A financial transaction recorded at the closure of an accounting cycle to properly assign earnings and expenses to the corresponding period.

Performed

Carried out or executed a task or function.

Prepaid

Refers to expenses that have been paid in advance of their due date and are recorded as assets until they are actually incurred.