What is the difference between an implicit cost and an explicit cost?
Ans. Implicit cost which we can not show as separated cost. Simple example of implicit cost is the cost of salary of businessman, if he works in his own small business. At that time, business will not pay him salary. So, it is implicit cost of business, but same time, if he works in his company type business, he has right to get salary and it will be explicit cost of his company type business. There is no need to record implicit cost in business but it is need to record explicit cost in books of business. Q:- 6. What is a rolling budget? Ans. A rolling budget is also known as a continuous budget. If businessman continues the business for next financial year, it will become rolling budget. In case capital expenditure, company can make 5 years rolling budget.
