Which of the following costs would not be included in accounting financial statements? O A. opportunity costs O B. sunk costs O C. historical costs D. All of the above would be included in accounting financial statements
Which of the following costs would not be included in accounting financial statements? O A. opportunity costs O B. sunk costs O C. historical costs D. All of the above would be included in accounting financial statements
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Question:**
Which of the following costs would not be included in accounting financial statements?
- A. opportunity costs
- B. sunk costs
- C. historical costs
- D. All of the above would be included in accounting financial statements
**Explanation:**
This multiple-choice question asks which types of costs are typically excluded from accounting financial statements. It presents four options:
- **Opportunity Costs:** These represent potential benefits lost when choosing one alternative over another. They are not directly recorded in financial statements.
- **Sunk Costs:** These are past costs that have already been incurred and cannot be recovered. While they may inform decision-making, they are not included in future-focused financial statements.
- **Historical Costs:** These refer to the original monetary value of an asset at the time of purchase. Historical costs are commonly reported in financial statements.
- **All of the above:** Suggests that all listed costs might be included, though this is inaccurate as opportunity and sunk costs are typically excluded.
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