If a Business Owner Is Using the Extra Space at Home

question 87

Essay

If a business owner is using the extra space at home for his business, does it imply a zero opportunity cost for the space?

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Definitions:

Temporary Account

An account that is used to collect balances over an accounting period and is reset to zero at the end of the period, such as revenue and expense accounts.

Advertising Expense

Costs incurred by a business to promote its products or services.

Accounts Payable

Money owed by a business to its suppliers or creditors for products or services received.

Income Statement Accounts

Categories within an income statement that record different types of revenue, expenses, gains, and losses, affecting the net income of a business.