Definition Opportunity cost is the potential benefit a company or investor buyer may have gotten had they chosen this opportunity over others. It means how much of a potential benefit or gain in investment is missed by a person had they not skipped that opportunity. Opportunity cost is a term that plays a major role …
Opportunity Cost: Definition, Formula, Example, and How Does It Work? Read More »
The term “overheads” refers to any expenses occurring within a business. However, it does not cover every expenditure. Instead, it only applies to expenses not related to a product or service directly. These may still be a part of the production process or relate to those items. However, companies cannot allocate them to a single …
Accounting For Actual And Applied Overhead: Explained Read More »
Cash transactions are one of the most common activities within any company. Usually, these involve paying various parties or receiving cash from them. However, most companies have transferred these transactions to their banks. This way, they have automated the system or made it smoother. However, companies still need cash at hand to handle various transactions. …
How Do You Record the Journal Entry for Petty Cash? Read More »
The accounting field has progressed significantly over the past. The introduction of standardized bodies and procedures has helped this field go global. On top of that, using technology in this area has also enhanced its reach greatly. Digital technology has played a vital role in helping the field progress even further. It contributed to more …
A business entity is incurring different expenses, direct and indirect, to keep the cycle running. Some expenses are direct to the core product or service of the business. While other expenses are incurred for selling the products and are not directly part of the production process. Material and labor are included in the direct costs …
What Is The Difference Between Direct and Indirect Overhead? Read More »
Companies incur different types of costs during the regular course of their operations. These costs may differ based on various criteria. For example, they may come from several sources or have a specific nature. Companies must identify these costs and separate them for better costing and decision-making. This process falls under the managerial accounting function …
How to Calculate Average Fixed Cost? Formula, Definition and Example Read More »
Accounting can be a perfect career choice for many students. This field requires a vast amount of knowledge and expertise. However, it can create a successful path for future growth. Usually, the goal for most accountants is to become a CFO or even a CEO in a well-reputed company. Apart from these, accountants can also …
Accounting incorporates various tasks that companies must perform to deal with financial transactions. This process involves recording, summarizing, analyzing, and reporting financial information. However, the most relevant branch of accounting is financial accounting. Within this branch, companies seek to prepare financial statements. These statements provide details of a company’s operations and activities for a period. …
What Are the Features And Characteristics of Managerial Accounting? Read More »
Managerial accounting refers to a branch of accounting that covers the flow of information internally. This branch covers various tools and techniques that companies can use to enhance decision-making. While financial accounting covers reporting information externally, managerial accounting is for internal purposes. For most companies, it is more crucial than financial accounting as it has …
What are Product Costs in Managerial Accounting? Read More »
In managerial accounting, separating direct and indirect costs is highly crucial. Managerial accounting refers to the branch of accounting which covers the internal accounting process. This branch covers the information flow within a company, particularly to managers. Based on this information, managers can make well-informed and better decisions. One of the fundamental areas included within …
