The main difference between EBITDA and Operating Income is that EBITDA measures a company’s profitability and helps to determine a business’ earning potential while operating income measures a company’s profit after subtracting operating expenses including outgoing general and administrative costs. Both Operating income and EBITDA are important accounting measures which help to derive the financial […]
Difference Between Monetary and Nonmonetary Assets
Key Difference – Monetary vs Nonmonetary Assets An asset is a resource with economic value that is owned or controlled by a company. Monetary and nonmonetary assets are one important classification of assets. The key difference between monetary and nonmonetary assets is that monetary assets can be readily converted into a fixed amount of […]
Difference Between Discretionary and Committed Fixed Costs
Key Difference – Discretionary vs Committed Fixed Costs Fixed costs are costs that do not vary depending on the number of units produced; they consist of a significant portion of the total costs. Discretionary and committed fixed costs are two types of fixed costs often incurred by all types of companies. The key difference […]
Difference Between Controllable and Uncontrollable Cost
Key Difference – Controllable vs Uncontrollable Cost Understanding the cost classifications of controllable and uncontrollable costs is vital in order to make a number of business decisions. It assists businesses to reduce costs and make choices as to whether or not to proceed with a certain decision. The key difference between controllable and uncontrollable […]
Difference Between Avoidable and Unavoidable Cost
Key Difference – Avoidable vs Unavoidable Cost Understanding the cost classifications of avoidable and unavoidable costs is vital in order to make a number of business decisions. The key difference between avoidable and unavoidable cost is that avoidable cost is a cost that can be excluded due to stoppage of conducting a business activity […]
Difference Between Job Costing and Contract Costing
Key Difference – Job Costing vs Contract Costing Job costing and contract costing are two popular methods of specific order costing that are important for businesses that provide a customized product. However, there are a number of differences between the two that should be clearly understood in order to distinguish them from one another. […]
Difference Between Job Costing and Batch Costing
Key Difference – Job Costing vs Batch Costing Job costing and batch costing are two specific order costing systems that are used by businesses. When the products are different from one another, or when a range of products are manufactured by the same company, it is difficult to assign the costs using a standard basis. […]
Difference Between Relevant and Irrelevant Cost
Key Difference – Relevant vs Irrelevant Cost Relevant and irrelevant costs are two types of costs that should be considered when making a new business decision; thus, they are two main concepts in management accounting. Companies should clearly identify the changes to the cost structure as a result of a new decision they are […]
Difference Between Perpetual and Periodic Inventory System
Key Difference – Perpetual vs Periodic Inventory System Having an effective inventory system is essential for companies that operate with a significant level of inventory. The objective of both perpetual and periodic inventory systems is to determine the ending inventory balance and the cost of goods sold. The key difference between perpetual and periodic […]
Difference Between Common Stock and Retained Earnings
Key Difference – Common Stock vs Retained Earnings The key difference between common stock and retained earnings is that common stock is the shares that represent the ownership of the company by equity shareholders whereas retained earnings are a portion of the company’s net income which is left after paying out dividends to shareholders. […]
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