TRACEABILITY, COST Definition

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TRACEABILITY, COST is where businesses rely on linking or tracing costs to outputs; managerial or cost accounting provides managers this information. Management accountants strive to establish causal relationships between costs and cost objects to determine why costs were incurred. The process of tracing costs to cost objects forges a necessary link so that ultimately costs can be traced to outputs, even if at an aggregated level to their main categories: Direct Costs, Indirect Costs, and General and Administrative Costs.

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ESOP see Employee Stock Ownership Plan.

ACCOUNTS PAYABLE TO SALES measures the speed with which a company pays vendors relative to sales. Numbers higher than typical industry ratios suggest that the company is using suppliers assets (cash owed) to fund operations.

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