Using the Legend Provided, Classify Each Statement Accordingly

question 84

Multiple Choice

Using the legend provided, classify each statement accordingly. In All cases, assume that taxable income is being adjusted to arrive at current E & P for 2019.
-Gain realized (but not recognized) on a like-kind exchange.

• A)Increase
• B)Decrease
• C)No effect

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Definitions:

Opportunity Cost

Represents the benefits that are missed or foregone when choosing one option over another.

Implicit Costs

Costs that represent the opportunity costs of using resources that the firm already owns, not involving direct monetary payment.

Explicit Costs

Direct, out-of-pocket expenses incurred in conducting an activity or business operation.

Economic Profit

The difference between total revenues and total costs, including both explicit and implicit costs, indicating the financial gain in an economic activity.