A. An imputed cost is a cost that has to be inferred because it does not represent an actual payment made or expense booked. An opportunity cost is one type of imputed cost. An opportunity cost is the amount a company could earn if it were use a resource for its next best alternative use. Decelerated depreciation would be the opposite of accelerated depreciation and would result in understated depreciation expense. Therefore, decelerated depreciation would be an example of an imputed cost, because it results in costs that are not stated.
B. An imputed cost is a cost that has to be inferred because it does not represent an actual payment made or expense booked. An opportunity cost is one type of imputed cost. An opportunity cost is the amount a company could earn if it were use a resource for its next best alternative use. Lending money at a below-market interest rate is an imputed cost of purchasing the supplier's products.
C. An imputed cost is a cost that has to be inferred because it does not represent an actual payment made or expense booked. Stated interest paid on a bank loan would not be an example of an imputed cost, because it is a stated cost for which actual payment is made.
D. Carrying obsolete assets on the balance sheet violates generally accepted accounting principles. Obsolete assets should be written off to expense, and thus continuing to carry them on the balance sheet results in an imputed cost (the write-off expense not booked).
