Economic Costs

question 190

Multiple Choice

Economic costs

• A) include both a normal rate of return on investment and the opportunity cost of each factor of production.
• B) are equal to the direct costs of hiring all factors of production.
• C) are the opportunity cost of each factor of production minus any interest charges paid on borrowed funds.
• D) are equal to total revenue minus accounting profit.

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Definitions:

Deferred Tax Item

An accounting concept representing a future tax liability or asset, resulting from temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

AASB 112

The Australian Accounting Standards Board standard that relates to Income Taxes.

Tax Deductible

Expenses that can be subtracted from gross income to reduce the amount of income that is subject to taxation.