Assuming Everything Else Equal, the Most Cost-Efficient Way for British

question 63

Multiple Choice

Assuming everything else equal, the most cost-efficient way for British Petroleum to transport crude oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be

• A)waterways.
• B)intermodal transportation.
• C)tanker trucks.
• D)railroads.
• E)pipelines.

Understand the concepts of depreciation and amortization and how they affect financial statements.

Calculate and record adjustments for prepaid and accrued expenses.

Calculate and record adjustments for unearned and accrued revenues.

Apply the matching principle by ensuring expenses and revenues are recorded in the period they are incurred or earned, regardless of the timing of cash transactions.

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Definitions:

Rational Decisions

Choices made by individuals that align with their own self-interest and are based on an evaluation of the costs and benefits of the action.

Marginal Costs

The extra financial burden of generating one additional unit of a good or service.

Marginal Benefits

The incremental satisfaction or advantage obtained from the consumption of an additional unit of a good or service.

Marginal Cost

Marginal cost is the increase in total production cost that arises from producing one additional unit of a good or service.