Final answer:
Implicit expenses require adjustment because the cash is paid in one period, but the resource is not completely used until a later period. These expenses represent the opportunity cost of using resources that the firm already owns, such as depreciation of assets like vehicles or equipment.
Step-by-step explanation:
Implicit expenses, also known as implicit costs, require adjustment because the cash is paid in one period, but the resource is not completely used until a later period. These expenses represent the opportunity cost of using resources that the firm already owns. For example, if a business owner uses their own vehicle for business purposes, the cost of depreciation for the vehicle would be an implicit expense. The owner has already paid for the vehicle, but its value decreases over time as it is used for business operations.