In accounting, costs are the monetary value of expenditures for supplies, services, labor, products, equipment and other items purchased for use by a business or other accounting entity. It is the amount denoted on invoices as the price and recorded in bookkeeping records as an expense or asset cost basis.

Opportunity cost, also referred to as economic cost is the value of the best alternative that was not chosen in order to pursue the current endeavour—i.e., what could have been accomplished with the resources expended in the undertaking. It represents opportunities forgone.

If a person has a job offer that pays $25 for an hour's work, and instead chooses to take a nap, then the accounting cost of the nap is zero; the person did not hand over any money in order to nap. However, the opportunity cost is the $25 that could have been earned working.

In theoretical economics, cost used without qualification often means opportunity cost