If Crop Dusting on Your Farm Causes Your Neighbors to Have

question 271

Multiple Choice

If crop dusting on your farm causes your neighbors to have sore throats, then crop dusting is creating

• A) only explicit costs.
• B) opportunity costs.
• C) external costs.
• D) internal costs.

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Definitions:

Profit Margin

A financial metric that measures the amount by which revenue from sales exceeds costs in a business, expressed as a percentage of revenue.

Periodic Reporting

The process of preparing and presenting financial statements at regular intervals, typically quarterly or annually.

Time Period Assumption

An accounting principle that allows the business activities to be divided into artificial time periods for financial reporting.

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjustments have been made for journal entries.