Know about the accrued cost

Operating expenses are often allocated differently in financial accounting than in cost accounting. If, for example, an expense incurred in external accounting covers a whole year, you must assign a proportion of such expenses to each individual cost accounting period. In this process, you distribute irregularly occurring expenses, according to cost-origin, to the months in which they are incurred. This allows you to avoid irregularities within cost accounting. Costs allocated in this manner, such as yearly bonuses, are termed accrued costs.

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