The Difference in Total Costs Between Two Alternatives Is Referred

question 27

Multiple Choice

The difference in total costs between two alternatives is referred to as the:

• A) direct cost.
• B) incremental cost.
• C) opportunity cost.
• D) sunk cost.

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Definitions:

Contra-Revenue

Accounts on the income statement that are deducted from gross revenue to arrive at net revenue, including sales returns, allowances, and discounts.

Discount Period

The timeframe during which a payment can be made at a reduced price or with a deduction from the full invoice amount.

Sales Discounts

A reduction in the sale price offered by a seller to a buyer for prompt payment or within a specific time period.

Accounts Receivable

Customers' financial commitments to a firm for goods or services taken, pending reimbursement.