If a Firm Has Total Revenue of $200 Million,explicit Costs

question 2

Multiple Choice

If a firm has total revenue of $200 million,explicit costs of $190 million and implicit costs of $10 million,its economic profit is:

• A)$200 million.
• B)$70 million.
• C)$10 million.
• D)$0 million.
• E)-$10 million.

---

Definitions:

Temporary Accounts

Accounts used to track transactions within a fiscal period that are then reset to zero at the start of the next period, such as revenue and expense accounts.

Retained Earnings

Part of shareholders' equity on a company's balance sheet, representing the amount of net income left over for the business after it has paid out dividends to its shareholders.

Control Account

An account used in the general ledger to summarize the balances of subsidiary accounts and facilitate the verification of financial information accuracy.

Customer Account Balances

The amounts owed to a company by its customers for goods or services delivered on credit.