Which Is NOT an Explicit Cost

question 268

Multiple Choice

Which is NOT an explicit cost?

• A) lease payments
• B) insurance
• C) office supplies
• D) salary that a business owner could have earned at an alternate job

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Definitions:

Consignment

A business arrangement in which goods are left in the possession of another party to sell, with payment to the consignor occurring after sale.

Consignor

The Consignor is the person or entity who owns goods that are sent to another party, known as the consignee, to sell on their behalf.

Consignee

The individual or entity to whom goods are shipped to be sold on behalf of the consignor, who retains ownership until the goods are sold.

FIFO

An inventory valuation method that assumes that the first items placed into inventory are the first sold.