GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Explicit cost is also known as ____
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Real cost
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Money cost
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Actual cost
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Implicit cost
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Explanation:
Detailed explanation-1: -Explicit costs-also known as “accounting costs”-are easy to identify and link to a company’s business activities to which the expenses are attributed. They are recorded in a company’s general ledger and flow through to the expenses listed on the income statement.
Detailed explanation-2: -Money cost is also known as the nominal cost. It is nothing but the expenses incurred by a firm to produce a commodity.
Detailed explanation-3: -Implicit costs represent the loss of income but do not represent a loss of profit. These costs are in contrast to explicit costs, which represent money exchanged or the use of tangible resources by a company.
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