The Opportunity Cost of an Alternative

question 120

Multiple Choice

The opportunity cost of an alternative

• A) includes only the direct monetary cost of whatever is chosen.
• B) is subjective and can only be determined by the person who chooses the alternative.
• C) is the value of all alternatives that must be forgone as the result of the choice.
• D) is relevant only in cases where the choice involves alternatives that would be considered undesirable.

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand for minor, everyday business expenses.

Replenishment

The process of restocking products or materials to maintain inventory levels and meet demand.

Internal Control Principles

Guidelines that govern the design and implementation of systems and procedures to ensure asset protection, data accuracy, and operational efficiency.

Possible Errors

Mistakes or inaccuracies that might occur in the recording or reporting of financial transactions.