There Are Two Types of Costs Associated with Production: ____

question 109

Multiple Choice

There are two types of costs associated with production: ____ costs that require monetary payments, and ____ costs that do not.

• A)implicit; accounting
• B)accounting; explicit
• C)implicit; explicit
• D)explicit; implicit
• E)accounting; economic

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Definitions:

Prepaid Freight

Costs paid by a shipper in advance for shipment of goods, indicating that the sender bears the freight charges.

Cash Discount

A reduction in the invoice price offered to buyers as an incentive for early payment.

Wholesalers

Companies that sell merchandise to other businesses rather than to the public.

Credit Terms

Terms for payment on account by the buyer to the seller.