10. Sam quit his job as an accountant with We Keep Books Accurately to open his
ID: 2457974 • Letter: 1
Question
10. Sam quit his job as an accountant withWe Keep Books Accurately to open his own accountingfirm. He earned $40,000 with the accounting firm We KeepBooks Accurately. During the current year Sam hadrevenues of $150,000 and total expenses of $110,000. Samearned an:
(a) Accounting profit of $40,000.
(b) Accounting profit of $40,000 and an entrepreneurial profit of$40,000.
(c) Entrepreneurial profit of $40,000, but had an accounting loss.
(d) Entrepreneurial profit of $80,000.
(e) Both A & D are correct.
11. Sam quit his job as an accountant with We KeepBooks Accurately to open his own
accounting firm. He earned$40,000 with the accounting firm We Keep Books
Accurately. Duringthe current year Sam had revenues of $150,000 and total expenses of$110,000. For Sam the opportunity cost of going into businesswas:
(a) $40,000.
(b) $110,000.
(c) $150,000.
(d) Zero because he had a profitable business.
Explanation / Answer
10.E. both A & D are correct. 11.A. $ 40,000
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