Question

Which of the following items is an implicit transaction? Recognizing a gain on the sale of equipment Recording payment of monthly interest on loan Recognizing impairment on an intangible asset Recognizing deferred revenue through delivery of goods

Answer 1

Answer:

The correct answer is the second option: Recording payment of monthly interest on loan.

Explanation:

To begin with, the term known as "implicit transaction" in the field of business management and accounting refers specifically to the situation where the "transaction" was not intended in the first place as a directly situation to get, therefore that it is said to be an opportunity cost that happens when the company uses another resources in order to do another activities. For example the situation where the monthly interest on the loan is paid back to the company.