Below are simple examples on relevant costs for readers to practice to understand relevant costs. Question No:1 ABC Ltd wishes to know the relevant cost of material X for a special contract. The contract will need 200 litres of Q. Currently in stock 150 litres Original cost of Q in stock $2 per litre Current … Read more
Difference Between Journal And Ledger Journal Ledger Journal is the book of prime entry where the transactions are first recorded and then to the ledger ( 1 stage) Compared to Journal, the ledger is recorded after the journal ( the 2 nd stage) Journalizing is the process of recording entries in the book of prime … Read more
The objective of this Standard is to prescribe the accounting treatment of revenue arising from certain types of transactions and events. The primary issue in accounting for revenue is determining when to recognise revenue. Revenue is recognised when it is probable that future economic benefits will flow to the entity and these benefits can be … Read more
The major difference between Income and Revenue is that Income encompasses both revenue and gains ( like for example gains or loss from disposal of fixed assets, foreign exchanges, etc which do not arise from the core business of an entity ) Income definition and scope is very much wider namely it denotes the increases … Read more
In economic analysis, the principle governing consumer behavior relates to the general behavior of a consumer in distributing a limited personal income amongst an infinite variety of goods and services available. It assumed the following: The consumer will so arrange expenditure that the relative marginal utility of all the goods consumed will be in the … Read more
Gross Capital formation in a given period is the expenditure on fixed capital assets(buildings, plant and machinery, vehicles,etc) either for replacing or adding to the stock of fixed assets. Note that the expenditure on repairs and maintenance is excluded. Depreciation is the fixed capital resources being used up or consumed due to wear and tear, … Read more
Capital One of the factors of production Defined as “ wealth which is use for the production of further wealth; or simply a commodity which is used in the production or other goods and services like plant or equipment Represents current consumption forgone in order to obtain future production and future consumption It enhances the … Read more