The Amount of Income That Would Result from an Alternative

question 177

Multiple Choice

The amount of income that would result from an alternative use of cash is called

• A) differential income
• B) sunk cost
• C) differential revenue
• D) opportunity cost

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Definitions:

Liabilities

Economic responsibilities or liabilities a corporation has towards other entities, necessitating repayment through transferring assets like money, merchandise, or services eventually.

Assets

Economic resources controlled by a business, capable of producing value, and are expected to benefit future operations, including cash, inventory, and property.

Creditors' Claims

Rights of lenders to receive payment from a borrower or from a borrower’s assets.

Liabilities

Liabilities represent obligations or debts that a company owes to external parties, which are expected to be settled through the outflow of resources or services.