Which of the Following Best Defines an Opportunity Cost

question 21

Multiple Choice

Which of the following best defines an opportunity cost?

• A) The difference in total costs from selecting one alternative instead of another.
• B) The benefit forgone by selecting one alternative instead of another.
• C) A cost that may be saved by NOT adopting an alternative.
• D) A cost that may be shifted to the future with little or no effect on current operations.

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Definitions:

Net 45

This payment term requires the buyer to pay the total net amount due within 45 days after the invoice date or goods receipt.

Income From Operations

Earnings derived from a company's primary business activities before taxes and extraordinary items.

Periodic Inventory System

An accounting method where inventory is updated in the accounting records periodically, often used by smaller businesses due to its simplicity.

Cost Of Merchandise

The purchase price of goods sold by a company, including the cost of acquiring the goods plus any additional expenses to bring them to saleable condition.