Question

20. Presented below are terms preceded by letters a throughfand followed by a list of definitions 1 through 6. Match the letter of the terms with the definitions. Use the space provided preceding each definition 1. Out-of-pocket cost 2. Relevant benefits 3. Relevant cost 4. Sunk cost 5. Incremental cost 6. Opportunity cost a. A cost that requires a current outlay of cash b. The incremental revenue generated by selecting a particular course of action over another c. An avoidable cost d. A cost that cannot be avoided or changed in any way because it arises from a past decision; irrelevant to current and future decisions e. An additional cost incurred only if a particular action is taken f. The potential benefits of one alternative that are lost by choosing an alternative course of action

Answer 1

1	Out-of-pocket cost	A cost that requires a current outlay of cash
2	Relevant benefits	The incremental revenue generated by selecting a particular course of an action over others
3	Relevant cost	An avoidable cost
4	Sunk Cost	A cost that cannot be avoided or changed in any way because it arises from a past decision, irrelevant to current and future decisions
5	Incremental cost	An additional cost incurred only if a particular action is taken
6	Opportunity cost	The potential benefits of one alternative that are lost by choosing an alternative course of action

The question is arranged in such a way that the answers are ordered in alphabetical order. 1,2,3,4,5,6 corresponds to a,b,c,d,e,f respectively