COST CONCEPT

COST CONCEPTS

• Accounting Costs and Economic costs: An entrepreneur has to pay price for the factors of production which he employs for production. He thus pays wages to workers employed, prices for the raw materials, fuel and power used, rent for the building he hires and interest on the money borrowed for doing business. 
• All these are included in his cost of production and are termed as accounting costs. Accounting costs relate to those costs which involve cash payments by the entrepreneur of the firm. Thus, accounting costs are explicit costs and includes all the payments and charges made by the entrepreneur to the suppliers of various productive factors. Accounting costs are expenses already incurred by the firm. Accountants record these in the financial statements of the firm. 
• However, it generally happens that an entrepreneur invests a certain amount of capital in his business. If the capital invested by the entrepreneur in his business had been invested elsewhere, it would have earned a certain amount of interest or dividend. 
• Moreover, an entrepreneur may devote his time to his own work of production and contributes his entrepreneurial and managerial ability to do business. Had he not set up his own business, he would have sold his services to others for some positive amount of money. Accounting costs do not include these costs. These costs form part of economic cost. 

Thus, economic costs include:

(1) the normal return on money capital invested by the entrepreneur himself in his own business; 

(2) the wages or salary not paid to the entrepreneur, but could have been earned if the services had been sold somewhere else. 

Likewise, the monetary rewards for all factors owned by the entrepreneur himself and employed by him in his own business are also considered a part of economic costs. Economic costs take into account these accounting costs; in addition, they also take into account the amount of money the entrepreneur could have earned if he had invested his money and sold his own services and other factors in the next best alternative uses. Accounting costs are also called explicit costs whereas the cost of factors owned by the entrepreneur himself and employed in his own business is called implicit costs. Thus, economic costs include both accounting costs and implicit costs. Therefore, economic costs are useful for businessmen while making decisions.

Goods and Service Tax Book (Updated upto 20th January 2018)

GST Student friendly Book most relevant/Useful for CA Intermediate/IPCC, CS executive , CWA Intermediate and CA final. 

Also useful for B.Com / M.Com / MBA/ BBA/UPSC/ SSC and Various Govt Exams.!! 

This book is approved by Ministry of HRD Govt.of India as Students friendly book.

Click on link given to Purchase Book-  https://goo.gl/ArNFJx

Author Name- CA Harshita Raichandani and CA Dhananjay Ojha

Unique features of This GST Book.

1.80+ GST chart included for quick revision of chapter.

2.Provisions presented in this book in simple manner.

3.Bullet and Heading given for Long term memorisation.

4.Updated upto 25th GST council recommendation {18th January, 2018}.

5.70+ Value added questions given with answer.

6.16 Chapters fully Coverage given.

7.Definitions of Technical term related with GST is given at one place.

8.Most useful for CA Intermediate/IPCC, CS executive , CWA Intermediate and CA final. ALSO useful for B.Com / M.Com / MBA/ BBA/UPSC/ SSC and Various Govt Exams.

Click on below Link to purchase Student friendly GST Book.

http://www.comgurukul.com/educational-books/gst-book/

GST (Goods and Services Tax) Book -A student friendly Book. - Bharat Gurukul

GST Student friendly Book most relevant/Useful for CA Intermediate/IPCC, CS executive , CWA Int