Good morning friends,

Introduction

Today I will be sharing this content earlier than usual to meet my daily activities, as always I usually make finance post, and this is one of them but this time we will be dealing on my field of study not mainly sha not truly decided, anyways we are going to be discussing

COST CONCEPT.

Body of content

Cost concept in accountingis one of the major fundamentals of accounting been said by my lecturer, he made us understood that cost concept is part of the basic any accountant or student of accountancy department should know, it's like or will I say it is, part of the basic principle of accounting.

So what does it say ?

Cost concept, simply is a concept that states that assets or resources acquired by a business are recorded in the account, not only the original purchase price but all other expenses that makes such assets or resources useful.

Hmm, funny concept right, the first I heard I was like, why that ?, To be honest I read it before lectures started but I was deceiving myself I only crammed the word not understood but thanks to explanation I get it now.

Source

You see in business, to be frank the issue of pricing (giving price to commodity), all we know according to lame man, street term or little knowledge term, that to make profit while pricing, we should increase the original price of the goods a little and that's profit, but now, gotten from the concept above it's a loss because the carriage inward(transportation of goods to eg. factory) is not included and that expenses came out of your pocket and if not accounted for on your price it will be deducted from your revenue (supposed to be profit or loss) which will make it a sure loss, but thanks to this principle you can get actual profit without much stress of calculation at the end of a trading period, accounting makes things fun and easy.

Conclusion

Source

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