What is the difference between Notional cost and Opportunity cost?
Notional costs and Opportunity costs are two important concepts in cost and management accounting as they have far reaching effects on decisions making process. But both are distinct and understanding the features of each type of cost is vital as it has important implications from decision making perspective. All opportunity costs included in the cost […]
What is Notional cost?
Notional means imaginary, speculative or conceptual i.e. something that has no actual existence and is mere imagination. Same way a notional cost is an imaginary cost which is sometimes included in the cost units and cost centers to make costing estimates more realistic or simply more challenging especially when the performance of cost unit and […]
What is Responsibility accounting?
In order to make the organization working at its best and reaching its potential to achieve objectives, the actual results are compared with the targets. And if those targets are not achieved someone must be held responsible. Because without accountability we cannot control business operations and cannot ensure the effective and efficient achievement of business […]
What is the difference between budgeting and forecasting?
Budgeting and Forecasting are two important constituents of managerial decision making process. Even though both of these functions are distinct and are not same but their use and their dependency on each other make them inseparable and thus many confuse the two as same and use them interchangeably. Let’s understand the technical difference between these […]
What is the difference between Cost and Expense?
Most of the time the difference between the terms Cost and Expense is ignored and are used interchangeably. However, the difference is significant from accounting perspective and being an accountant it is good if we keep these two terms separate to cause lesser confusion and clearer communication of financial information. Cost can be defined as […]
