Question

Such expenses which are included (even though they are not incurred) for taking managerial decisions are called ___________.

• A. Notional Expenses
• B. Actual Expenses
• C. Imputed Expenses
• D. None of these

Answer 1

The correct option is A Notional Expenses

Expenses which are considered as expenses by not actually incurred are called notional expenses. For example, rent of own building where the firm is doing the business. For calculating the profit & loss, the rent may be considered as notional rent.

Actual Expenses means the actual expenses paid or incurred by Landlord during any Operating Year for the Building Operating Expenses, the Building's Pro Rata Share of the Development Common Area Expenses, and Real Property Taxes.

An imputed cost is a cost that is incurred by virtue of using an asset instead of investing it or undertaking an alternative course of action. An imputed cost is an invisible cost that is not incurred directly, as opposed to an explicit cost, which is incurred directly.