An Opportunity Cost

question 117

Multiple Choice

An opportunity cost:

• A) Is an unavoidable cost.
• B) Requires a current outlay of cash.
• C) Results from past managerial decisions.
• D) Is the lost benefit of choosing an alternative course of action.
• E) Is irrelevant in decision making.

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Definitions:

Rent Expense

The cost incurred by a company to lease property or equipment for business operations, reported as an operating expense.

Unearned Revenues

Money received by a company for a product or service that has yet to be delivered or performed.

Liabilities

Financial obligations or debts owed by a company to creditors, expected to be paid in the future.

Balance Sheet

A detailed statement that captures a business's assets, liabilities, and shareholder equity as of a specific date.