Figure 1.3 -Which of the Following Is an Example of Opportunity Cost

question 29

Multiple Choice

Figure 1.3

-Which of the following is an example of opportunity cost?

• A)The Chinese food that you give up when you choose to eat Italian food.
• B)The tuition that you pay to attend college.
• C)For a professor of economics, the pleasure that he or she derives from teaching economics.
• D)Sweets given up by a person who would never eat them even if he or she could.
• E)The price paid for a ticket when you go for a movie.

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Definitions:

Allowance for Doubtful Accounts

An accounting provision made by a company to account for customers who may not be able to make required payments, affecting the accounts receivable balance.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Adjusting Entry

An accounting journal entry made at the end of a period to record any unrecognized income or expenses for that period, ensuring accuracy of the financial statements.

Maturity Value

The amount to be paid to the holder of a financial instrument at its maturity date.