You Can Spend $100 on Either a New Economics Textbook

question 130

Multiple Choice

You can spend $100 on either a new economics textbook or a new tablet computer.If you choose to buy the new economics textbook,the opportunity cost is:

• A)$100.
• B)your enjoyment of the new tablet computer.
• C)both the $100 and your enjoyment of the new tablet computer.
• D)impossible to determine.

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Definitions:

Direct Write-off Method

A method of accounting for bad debts that involves charging unpaid invoices directly to the expense account when they are determined to be uncollectible.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and record them as an expense.

Bad Debts

Money owed to a company that is considered irrecoverable and is written off as a loss.

Outstanding Balances

The total amount of money owed that has not yet been paid.