The Financial Statements of Firms Generally Are Audited by

question 25

Multiple Choice

The financial statements of firms generally are audited by

• A)employees of the firm being audited.
• B)employees of private accounting firms.
• C)employees of the federal government.
• D)the board of directors of the corporation being audited.

---

Definitions:

Explicit Costs

The direct payment costs to others in the course of running a business or undertaking an economic transaction.

Implicit Costs

Costs that represent forgone opportunities, often not directly outlaid but incurred when resources are used for one purpose over another.

Marginal Cost

captures the cost added by producing one extra item of a product, emphasizing the concept of economies of scale and efficiency in production.

Marginal Product

An increase in output resulting from the use of one more unit of a particular input, holding all other inputs constant.