Definition: A Sunk Cost is the cost already incurred by the firm and cannot be recovered or refunded. The cost which was incurred in the past and is now permanently lost is called as a Sunk Cost. Suppose, a firm has spent Rs 50,000 in the construction of a building, but due to some government law the construction has to be stopped, then the amount spent till date is a sunk … [Read more...] about Sunk Cost
Accounting
Capitalized Cost
Definition: A Capitalized Cost is the cost incurred in the purchase and financing of fixed assets. It includes not only the price paid for an asset but also the expenses incurred on its installation and transportation. A capitalized cost is added to the fixed assets and is shown on the assets side of the balance sheet. These costs are not deducted from revenues during the … [Read more...] about Capitalized Cost
Vote on Account
Definition: The Vote on Account is the special provision given to the government to obtain the vote of Parliament to withdraw money when the budget for the new financial year is not released or the elections are underway, and the caretaker government is in place. Simply, the approval given by the parliament to withdraw a certain sum of money from the consolidated funds of … [Read more...] about Vote on Account
Income Tax
Definition: The Income Tax is the annual charge levied on the income viz. Salary, wage, commission, dividend, bonus, etc. of an individual, company or a firm. For each assessment year, the rate of tax levied on different income levels, as prescribed in the slab, is defined in the Union Budget (Finance Act). In India, the income tax is charged annually at the end of each … [Read more...] about Income Tax