Which of the following statements is true of costs associated with goods for sale?
A) Appraisal costs is a subcategory of shrinkage costs.
B) Special processing costs are always part of purchasing costs.
C) Opportunity costs are not recorded in the accounting system.
D) Stockout costs are costs that arise when a company runs out of a particular item for which there is no customer demand.

Question

Quizplus · Accepted Answer

Opportunity costs represent the benefits an entity misses out on when choosing one alternative over another. Since these costs are theoretical and do not involve a direct outlay of cash, they are not recorded in the financial accounting system.

Which of the Following Statements Is True of Costs Associated