Which of the Following Statements Describes an Economic Event from an Accounting

question 90

Multiple Choice

Which of the following statements describes an economic event from an accounting perspective?

• A) The signing of a service contract is an example of an external event that is recorded in the accounting records.
• B) Every event that affects an entity can be identified from a source document.
• C) All internal and external events must be measured with sufficient reliability.
• D) External events involve exchanges between an entity and another entity outside the company.

Understand the concept of economic costs including explicit and implicit costs.

Calculate economic profit and distinguish it from accounting profit.

Identify the components of total revenue and total cost to determine profit.

Understand opportunity costs and how they influence business decisions.

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Definitions:

Blood Hydrogen

Indicates the concentration of hydrogen ions in the blood, often related to the measurement of blood pH levels to assess acidity or alkalinity.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is absorbed by plants in photosynthesis.

Enzyme Specificity

The characteristic that allows an enzyme to choose only one substrate or a group of similar substrates, facilitating a specific chemical reaction.

Surface Tension

A physical property of liquids that causes the surface to behave as an elastic sheet, often observed as droplets forming shapes that minimize surface area.