The most important implicit cost generally omitted from the accounting statement of a firm is the
A) rental cost of machinery.
B) cost of compliance with government regulations.
C) opportunity cost of the equity capital invested by the owners.
D) accounting cost incurred as the result of tax compliance.

Question

Quizplus · Accepted Answer

The opportunity cost of the equity capital invested by the owners is often omitted from accounting statements because it represents the potential earnings from the next best investment alternative that the owners forego by investing in the firm.

The Most Important Implicit Cost Generally Omitted from the Accounting