AVERAGE COST Definition

AVERAGE COST is total cost for all units bought (or produced) divided by the number of units.

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PROVISION, generally, is to prepare in advance for an event that is projected to take place in the future. In accounting, it is an amount charged against profits for a specific liability (for example: bad debts, depreciation or taxes). A liability may be known, but the amount is often uncertain. This uncertainty may lead to an adjustment in a later income statement once the final amount of the liability is ascertained.

INHERENT LIMITATION is whether the potential effectiveness of an entity's internal control is subject to inherent limitations, e.g., human fallibility, collusion, and management override.

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