In terms of managerial accounting,which of the following is the best definition of cost?
A)the cash sacrificed for goods expected to bring future benefit to the organization
B)a dollar measure of the cash used to achieve a given benefit
C)the asset incurred to produce future benefits
D)the equivalent of the cost of goods sold

Question

Quizplus · Accepted Answer

Cost in managerial accounting refers to the cash sacrificed or expended for the acquisition of goods or services that are expected to bring future benefits to the organization. This definition takes into account the concept of opportunity cost, which recognizes that choosing one option over another means giving up the benefits that could have been derived from the forgone option. Option B is incorrect because cost is not always measured in dollars; it can also be measured in other units of value such as time, resources, or effort. Option C is incomplete because it defines cost as an asset when in fact cost represents a reduction in assets. Finally, option D is incorrect because cost of goods sold is only one type of cost and does not capture the full range of costs incurred by an organization.

In Terms of Managerial Accounting,which of the Following Is the Best