Question

Costs, such as investigating the possibilities of and actually creating or acquiring a trade or business, are referred to as (1)-(2) costs.

a. Exploration and Development
b. Start-up and Organizational
c. Preliminary and Exploration
d. Start-up and Preliminary

Answer 1

Costs related to establishing a business are known as start-up and organizational costs, covering both monetary expenses and time and effort investments.

Step-by-step explanation:

The costs of investigating the possibilities of and actually creating or acquiring a trade or business are referred to as start-up and organizational costs. These costs encompass the money, time, and effort necessary to establish a business entity.

They include expenses for legal fees, marketing research, and the procurement of assets and materials. Similarly, firms must consider both explicit costs, such as wages and rent, and implicit costs, which are opportunity costs of using resources the firm owns, in their cost calculations. Careful management of these costs is essential for the successful launch and sustainable operation of a business.