Key Difference – Period Cost vs Product Cost Period cost and product cost, as their names imply, are related to specific period and output, respectively. The key difference between period cost and product cost is that period cost is an expense that is charged for a time period in which it is incurred whereas […]
Difference Between Fixed Capital and Working Capital
Key Difference – Fixed Capital vs Working Capital The key difference between fixed capital and working capital is that fixed capital refers to long-term investments that are not consumed during the production process whereas working capital deals with short-term liquidity (how conveniently an asset can be converted into cash) position in a company. Both […]
Difference Between T Account and Ledger
Key Difference – T Account vs Ledger The key difference between T account and ledger is that T account is a graphical representation of a ledger account whereas ledger is a set financial accounts. Therefore, a ledger can also be interpreted as a collection of T accounts. Understanding T accounts and ledger is essential […]
Difference Between Cost Effectiveness Analysis and Cost Benefit Analysis
Key Difference – Cost Effectiveness Analysis vs Cost Benefit Analysis The key difference between cost effectiveness analysis and cost benefit analysis is that cost-effectiveness analysis compares the relative costs and outcomes (effects) of a project whereas cost benefit analysis assigns a monetary value to the measure of the effect of a project. The use of these […]
Difference Between Prime Cost and Conversion Cost
Key Difference – Prime Cost vs Conversion Cost The key difference between prime cost and conversion cost is that prime costs are the costs that can be directly traceable to production units whereas conversation costs are the other related costs of production that cannot be conveniently recognized against a unit of output. Knowledge of […]
Difference Between Direct Write Off Method and Allowance Method
Direct Write Off Method vs Allowance Method If a customer defaults the payment, this will be called a ‘bad debt’. When an account is deemed to be uncollectible, the company must remove the receivable from the accounts and record an expense. This is considered an expense because bad debt is a cost to the […]
Difference Between Accounts Receivable and Notes Receivable
Key Difference – Accounts Receivable vs Notes Receivable The key difference between accounts receivable and notes receivable is that accounts receivable is the funds owed by the customers whereas notes receivable is a written promise by a supplier agreeing to pay a sum of money in the future. These are two principal types of […]
Difference Between Cash Rate and Interest Rate
Key Difference – Cash Rate vs Interest Rate The key difference between cash rate and interest rate is that cash rate refers to the rate at which commercial banks borrow funds from the central bank whereas interest rate refers to the rate at which a financial charge is received\paid on saved or borrowed funds. […]
Difference Between Demand Pull Inflation and Cost Push Inflation
Key Difference – Demand Pull Inflation vs Cost Push Inflation The key difference between demand pull inflation and cost push inflation is that while demand pull inflation occurs when the demand in an economy rises to outpace the supply, cost push inflation takes place when the cost of production increases in terms of the […]
Difference Between Zero Based Budgeting and Performance Budgeting
Key Difference – Zero Based Budgeting vs Performance Budgeting Budgets are important tools used by corporates and governments to assist planning for the future. Budgeting provides a basis to compare results with, evaluate performance and to take corrective actions for the future. The key difference between zero based budgeting and performance budgeting is that […]
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