If Jessie Studies Economics for Two Hours Instead of Going

question 38

Multiple Choice

If Jessie studies economics for two hours instead of going to the movies with her friends,then

• A) the benefit of studying is the missed movie.
• B) the opportunity cost of studying is the missed movie.
• C) Jesse definitely is making a rational choice.
• D) Jessie is ignoring a sunk cost.
• E) Jessie is not responding to any incentives.

Recognize the impact of stock ownership percentages on income recognition and consolidation.

Know the components and calculation of the cost of bond investments.

Identify the types of financial statements and their purposes.

Understand the procedures for recording bond investments and interest.

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Definitions:

Marketability

The ease with which a security or asset can be converted into cash without significantly affecting its price.

Current Liabilities

Obligations or debts that a company is expected to pay within one fiscal year or its operating cycle, whichever is longer.

Long-term Bank Loans

Long-term bank loans are borrowings from banks with repayment terms extending beyond one year, used for financing significant investments or operations.

Marketable Securities

Financial instruments that can be quickly converted into cash at a reasonably predictable price.