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ИД «Финансы и кредит»






International Accounting

The economic category of product of labor cost in accounting

Vol. 19, Iss. 14, JULY 2016

PDF  Article PDF Version

Received: 28 April 2016

Received in revised form: 12 May 2016

Accepted: 26 May 2016

Available online: 27 July 2016


JEL Classification: М41

Pages: 2-18

Biryukova O.A. Russian University of Cooperation, Cheboksary Branch, Cheboksary, Chuvash Republic, Russian Federation

Importance The economic substance of cost has always been and still remains among scientific and practical priorities. Nowadays, the term prime cost (cost) in the literature is often defined through the categories of costs and expenses, which are often interpreted and understood as synonyms. Therefore, it is crucial to systematize the economic categories of costs, expenses and prime cost relative to each other.
Objectives The purpose is to find out the most precise semantic content of the term cost of product of labor in accounting through the analysis of its usage in different situations and in the context of accounting specialists' researches.
Methods To clarify the characteristics of the subject matter, I applied a comparison method to analyze terms costs, expenses and prime cost.
Results The study shows that there are various interpretations of costs, expenses and prime cost economic categories in the economic literature. I examined the transformation of costs into expenses or assets, the correlation of costs, expenses and prime cost categories, their interrelations. The paper provides a definition of prime cost by types.
Conclusions Costs are primary relative to expenses; they are transformed into expenses from ordinary activities as a result of realization of the product of labor in the reporting period, and otherwise, into company assets. Therefore, the cost of product of labor category can be reflected through both costs and expenses, depending on the type of cost. If we talk about cost of finished product, it is referred to costs, if about the cost of finished product expensed through sales, it is referred to expenses.

Keywords: costs, expenses, prime cost, accounting


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