Which of the following is true of an opportunity cost?
A) It is the income foregone by not using a resource in an alternative way.
B) The higher the opportunity costs, the lower is the relevant cost.
C) It is recorded as an expense in the accounting records.
D) It is an unavoidable cost that cannot be changed no matter what action is taken.

Question

Quizplus · Accepted Answer

Opportunity cost is the cost of sacrificing the benefits of the next best alternative. It is the income foregone or the value of the alternative foregone by choosing one option over another. This cost cannot be recorded in the accounting records as it does not involve any actual expenditure.

Which of the Following Is True of an Opportunity Cost