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What is a real world example of the cost concept

What is a real world example of the cost concept
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Answer #1

Cost concept or principle is an accounting concept according to which the assets must be recorded at historical cost or the acquisition cist in the balance sheet

Eg Apple company bought land to expand its operations at $120000 on January 1, 2015. The fair market value as on January 1 2020 is $180000 . The company records value of land at its acquisitiom cost i.e $120000

Cost concept cam also be related to cost accounting in which it means expenditure incurred by firm on wages, materials , overheads for the production of goods.

Real life example can be Apple company manufactures phones requiring direct material worth $400000 , direct labour $56000 , indirect material , salaries of supervisors etc $70000.

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