Which of the Following Statements Is Incorrect

question 7

Multiple Choice

Which of the following statements is incorrect?

• A) Many costs eventually become expenses.
• B) A cost that provides future economic benefits is treated as an asset.
• C) To accountants, the terms cost and expense always mean the same thing.
• D) An expense is the consumption or loss of resources that will result in a decrease in equity.

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Definitions:

Trade-off

A situation that involves losing one quality, aspect, or amount of something in return for gaining another quality, aspect, or amount.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs, representing the trade-offs of producing one good over another.

Constant Rate

A fixed or unchanging value or pace at which a particular variable or condition progresses over time.

Mittens

Hand coverings which encase the four fingers together and the thumb separately, designed to provide warmth.