The Opportunity Cost of an Activity Means The

question 103

Multiple Choice

The opportunity cost of an activity means the:

• A) amount of money the activity costs.
• B) number of hours that is required to engage in this activity.
• C) expected gains by engaging in the activity.
• D) amount of other things that must be sacrificed in order to engage in the activity.
• E) expected gains minus the expected costs of engaging in the activity.

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Definitions:

Voucher System

A control mechanism in accounting to ensure all business transactions are properly authorized and recorded.

Liabilities

A company's legal financial debts or obligations that arise during the course of business operations, to be settled over time through the transfer of economic benefits including money, goods, or services.

Cash Payment

A transaction in which the payment for a good or service is made with cash at the time of purchase.

Cash Register Tape

A continuous roll of paper that records the transactions processed through a cash register, serving as a transactional record.