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
Luchkina A.A. [Economic substance of the costs category, its correlation with the concepts of expenses and charges]. Novyi universitet. Seriya Ekonomika i pravo = New University. Economics and Law Series, 2014. no. 4(38), pp. 76–81. (In Russ.)
Chernobrivaya N.V., Gladkova N.V.[Methodological framework for applying the concepts of costs, expenses and charges in theory and in practice]. Baltiiskii ekonomicheskii zhurnal = Baltic Journal of Economics, 2010, no. 2, pp. 195–206. (In Russ.)
Kaverina O.D., Lebedeva P.M. [Accounting for costs and cost accounting: the past and the present]. Bukhgalterskii uchet v sel'skom khozyaistve = Accounting in Agriculture, 2012, no. 7, pp. 46–55. (In Russ.)
Badmaev Ch.A., Badmaeva E.A.[The economic nature of production costs]. Agrarnaya nauka = Agrarian Science, 2011, no. 6, pp. 4–5. (In Russ.)
Efremova A.A. Sebestoimost': ot upravlencheskogo ucheta zatrat do bukhgalterskogo ucheta raskhodov [Cost: from managerial cost accounting to accounting for expenses]. Moscow, Vershina Ppubl., 2006, 208 p.
Druzhilovskaya T.Yu.[On the relationship between the concepts of costs and expenses]. Vestnik Kazanskogo gosudarstvennogo finansovo-ekonomicheskogo instituta = Vestnik of Kazan State Finance and Economics Institute, 2007, no. 2, pp. 28–30. (In Russ.)
Konstantinov V.A., Ginovker M.E., Alimov S.A.[Proper use of terms expenses, costs and charges when building the internal accounting and analytical system for industrial enterprises]. Upravlencheskii uchet = The Management Accounting Journal, 2006, no. 2. (In Russ.)
Kuvaldina T.B.[Costs and expenses in the accounting system of commercial organizations]. Bukhgalterskii uchet = Accounting, 2009, no. 13, pp. 70–73. (In Russ.)
Sokolov Ya.V. [Cost accounting: from theory to practice]. Bukhgalterskii uchet = Accounting, 2006, no. 6, pp. 44–47. (In Russ.)
Sytnik O.E., Ledneva Yu.A.[The economic substance of the categories of costs, expenses and charges and their industry specifics]. Vestnik Severo-Kavkazskogo federal'nogo universiteta = Bulletin of North Caucasus Federal University, 2009, no. 4, pp. 241–245. (In Russ.)
Usatova L.V., Peresypkina N.N.[Analysis of costs, expenses, and charges categories from the standpoint of financial and management accounting]. Vestnik Instituta druzhby narodov Kavkaza Teoriya ekonomiki i upravleniya narodnym khozyaistvom = Bulletin of Institute of Caucasus Peoples' Friendship, 2010, no. 4(16), pp. 158–168. (In Russ.)
Kucherova E.V., Ovchinnikova D.S.[On the use of accounting concepts of costs, expenses, and charges]. Vestnik Kuzbasskogo gosudarstvennogo tekhnicheskogo universiteta = Bulletin of Kuzbass State Technical University, 2013, no. 3(97), pp. 160–162. (In Russ.)
Bulgakova S.V., Platova N.N.[Difference between the concepts of costs and expenses in accounting]. Aktual'nye problemy ucheta, ekonomicheskogo analiza i finansovo-khozyaistvennogo kontrolya deyatel'nosti organizatsii: materialy II Mezhdunarodnoi zaochnoi nauchno-prakticheskoi konferentsii [Proc. 2nd Int. Conf. Topical Issues of Accounting, Economic Analysis and Financial and Economic Control over organizations' activity]. Voronezh, Voronezh State University Publ., 2015, pp. 12–14. (In Russ.)
Morozova I.M. Raskhody i zatraty: ponyatie i priznanie v uchete. V kn.: Evolyutsiya sovremennoi nauki: sbornik statei Mezhdunarodnoi nauchno-prakticheskoi konferentsii [Costs and expenses: definition and recognition in accounting. In: Evolution of modern science: a collection of articles of the International scientific and practical conference]. Ufa, Aeterna Publ., 2015, pp. 146–148.
Garifullin K.M.[On the interpretation of terms costs, expenses, and charges in accounting].Vestnik Kazanskogo gosudarstvennogo finansovo-ekonomicheskogo instituta=Vestnik of Kazan State Finance and Economics Institute, 2007, no. 3, pp. 17–20. (In Russ.)
Kir'yanov I.V.[Financial modeling: prime cost as a linkage of elements of costs]. Ekonomika i upravlenie v XXI veke: tendentsii razvitiya = Economics and Management in 21st Century: Development Trends, 2013, no. 12, pp. 8–22. (In Russ.)
Gribanov A.A., Kudinova M.V.[The relationships between the categories of costs and expenses in accounting]. Vestnik Voronezhskogo gosudarstvennogo agrarnogo universiteta = Vestnik of VSAU,2010, no. 2, pp. 81–86. (In Russ.)
Ivashkevich V.B., Ermakova N.A.[Calculating the total cost of production in the international accounting practice]. Bukhgalterskii uchet = Accounting, 2002, no. 18, p. 54. (In Russ.)
Vrublevskii N.D. [Costing-based accounting for production of complex manufacturing facilities]. Bukhgalterskii uchet = Accounting, 2014, no. 4, pp. 69–78. (In Russ.)
Karpova T.P., Veretsuk I.I.[The importance of scientific classification of costs from the perspective of the concept of sustainable economic development]. Ekonomika i predprinimatel'stvo = Economy and Entrepreneurship, 2015, no. 10-2, pp. 181–184. (In Russ.)
Kuter M.I. [On cost accounting for information services]. Bukhgalterskii uchet = Accounting, 1998, no. 1, pp. 17–20. (In Russ.)
Anthony R.N., Reece J.S. Accounting, Text and Cases. 8th edition. Homewood, IRWIN, 1989.
Needles B.E., Anderson H.R., Caldwell J.C. Principles of Accounting. Houghton Mifflin Harcourt Publishing Company, 1993.
Satkevich D.A. [Current problems in the application of concepts of costs, expenses and charges in accounting]. Веснік Гродзенскага дзяржаўнага ўніверсітэта імя Янкі Купалы. Серыя 5: Эканоміка. Сацыялогія. Біялогія, 2012, no. 2(131), pp. 74–80.
Barteneva S.S.[Analysis of scientific knowledge about the cost category in the economic environment]. Nauka i sovremennost' = Science and Modernity, 2010, no. 3-3, pp. 72–76. (In Russ.)