The Basic Difference Between Explicit and Implicit Costs Is That

question 56

Multiple Choice

The basic difference between explicit and implicit costs is that

• A) explicit costs are measurable; implicit costs are not.
• B) implicit costs are measurable; explicit costs are not.
• C) explicit costs are private costs; implicit costs are social costs.
• D) explicit costs are fixed costs; implicit costs are variable costs.
• E) explicit costs reflect externally supplied resources; implicit costs reflect owner-supplied resources.

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Definitions:

Cash Recorded

Cash recorded refers to the recording of cash transactions in the financial ledgers and accounts of a business, providing a trackable record of all cash movements.

Cash Payments Journal

A financial journal that tracks all cash outlays of a business, including expenses, asset purchases, and debt repayments.

Cash Purchase

This term refers to a transaction where goods or services are bought and paid for with cash or cash equivalent immediately at the point of sale.

Supplies Recorded

This refers to the accounting practice of recognizing and recording office or operational supplies as expenses when they are used.