Use the information below to answer the following question(s).
The top management at Munchie Company, a manufacturer of computer games, is attempting to recover from a flood, which destroyed some of its accounting records. The main computer system was also severely damaged. The following information was salvaged:

-Costs recognized in particular situations that are not recognized by accrual accounting procedures are
A) opportunity costs.
B) imputed costs.
C) cash accounting costs.
D) incremental costs.
E) capital costs.

Question

Use the information below to answer the following question(s).
The top management at Munchie Company, a manufacturer of computer games, is attempting to recover from a flood, which destroyed some of its accounting records. The main computer system was also severely damaged. The following information was salvaged:
 
-Costs recognized in particular situations that are not recognized by accrual accounting procedures are
A) opportunity costs. 
B) imputed costs. 
C) cash accounting costs. 
D) incremental costs. 
E) capital costs.

Quizplus · Accepted Answer

Imputed costs are costs that are not actually incurred but are assigned to a particular situation for the purpose of analysis. These costs are not recognized by traditional accrual accounting procedures. Therefore, imputed costs are the best answer in this scenario where accounting records were lost due to flood damage.

Use the Information Below to Answer the Following Question(s)