Which of the Following Is an Example of an Implicit

question 163

Multiple Choice

Which of the following is an example of an implicit cost?

• A)salaries paid to owners who work for the firm
• B)interest on money borrowed to finance equipment purchases
• C)cash payments for raw materials
• D)foregone rent on office space owned and used by the firm

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Definitions:

Accumulated Depletion

The total amount of natural resource extraction charged as an expense over time to depreciate the asset's value.

Balance Sheet

An overview presenting a business's assets, liabilities, and the equity belonging to shareholders, captured at a particular instant.

Mining Rights

Legal permissions granted to extract minerals, oil, or gas from the land, potentially involving leasing or ownership arrangements.

Depletion Expense

The process of transferring the cost of natural resources to an expense account.