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

Question

Quizplus · Accepted Answer

The amount sacrificed for goods expected to bring future benefit to the organization is the best definition of cost in managerial accounting. This definition encompasses the idea that costs are not just the expense of a particular transaction or purchase, but instead reflect the investment made in resources that are expected to generate benefits for the business in the future. Option A only considers the cost of goods sold and does not account for other types of costs. Option B refers more to an asset than to a cost. Option C is too narrowly focused on cash and does not take into account other types of resources.

In Terms of Managerial Accounting, What Is the Best Definition