A cost typically refers to the price paid to acquire an asset, while an expense is an ongoing expense, such as an employee's salary or rent on a retail space. Further, a cost is often a one-time outlay for something that provides future benefits, whereas an expense is a recurring payme...
Initially the truck’s cost will be recorded in the asset account Delivery Truck. However, the truck’s cost will become Depreciation Expense as the truck is “used up” in the company’s revenue-generating activities. Related Questions How do I determine the cost of missing inventory? What...
Non-accountants might use the term income instead of the word revenue. Generally, accountants use the term income to mean “net of revenues and expenses.” For example, a retailer’s income from operations is its net sales minus the cost of goods sold minus its selling, general and administr...
One of the primary differences between revenue and profit is where each number is reported on a company's income statement. Revenue is always reported toward the top because it's less inclusive. Profit is always further down because it incorporates expenses. This leads to another key difference:...
Revenue is the total income earned by a company for selling its goods and services. Earnings are revenues minus all expenses associated with operating the business.
Cost Centre Cost Centres emphasize minimizing and monitoring expenses. The maintenance division is a crucial Cost Centre in manufacturing firms. 5 Profit Centre Profit Centres have control and accountability over revenue and cost. The regional office, as a Profit Centre, was evaluated based on its ...
What s the difference between marginal revenue product and marginal revenue, and illustrate the distinction with an example? Under what conditions is marginal revenue product (MRP) equal to value marginal product (VMP)? What is the difference between marginal cost and margina...
Explain the difference between incremental and zero-based budgeting methods. How are the statistic, expense, revenue and operating budgets related? Distinguish between the cash budget and the capital budget. Define and explain marginal cost of capital. What is the di...
A difference between turnover and profit is that a rising turnover may be a sign that the business is growing but profit is an indicator of the health of the business. If the business cannot earn profits, it cannot continue in the long term. A profitable business can generate cash for fu...
An expense refers to money spent by the company, or a cost incurred by the company, in an effort to generate revenue for that company. A company may have both a liability account and an expense account, but each serves a very different purpose. What Is a Liability Account? A liabi...