For Which of the Following Decisions Would Marginal Analysis Be

question 136

Multiple Choice

For which of the following decisions would marginal analysis be relevant?

• A) spending $1,000 on a summer vacation or on painting your house
• B) deciding how much to spend on a summer vacation
• C) buying a new car or a second-hand car
• D) eating dinner at home or going out to a restaurant for dinner

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Definitions:

Sales Tax Expense

The cost incurred by a business collecting sales tax from customers, which is then remitted to the government, not to be confused with a direct business expense.

Accrued Interest

Interest that has been incurred but not yet paid, typically recorded as a liability on the balance sheet.

Interest Charged

Interest charged is the cost applied to borrowing money, typically expressed as an annual percentage of the loan amount.

Interest Payable

This is a liability account that records the amount of interest the company owes but has not yet paid.