We'll see the major categories of costs tracked. The Big 3 Up to this point, we treated costs as though they were one big category. Now it's time to see how companies divide their costs into different categories. They do this to track what they spend money for and to control that spending. For example, spending a dollar to make a product is very different from spending a dollar to advertise it.
Most companies use three big categories for their costs.
Originally the capital is in the form of cash. You own assets as an individual. Putting Assets to Work As a company begins operations, it owns some cash, raw materials, land, buildings, and equipment. This gets the company started. The raw material will be turned into finished products.