Opportunity costs are not recorded in financial accounting systems because historical record keeping is limited to...
Opportunity costs are not recorded in financial accounting systems because historical record keeping is limited to transactions involving alternatives that managers actually selected rather than alternatives that they rejected.
true or false
Homework Answers
Opportunity costs are not recorded in financial accounting systems because historical record keeping is limited to transactions involving alternatives that managers actually selected rather than alternatives that they rejected.
The correct answer is TRUE. In historical accounting only those costs/transactions are recorded which has produced transactions. Since opportunity costs does not result in the production or conversion into a transactions, these costs are not recorded. Opportunity cost is basically the cost of opportunity which is lost when the company choses one alternative over the other. It is the income which is foregone by selecting an alternative over another when there are more than 1 alternatives available.
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Opportunity costs are not recorded in financial accounting
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