Accounting profit, Managerial Accounting

Assignment Help:

Accounting Profit is a company's sum total earnings, computed according to Generally Accepted Accounting Principles (GAAP), and involves the explicit costs of operating business, like interest, depreciation and taxes.

Accounting profits tend to be more than economic profits as they skip some implicit costs, like opportunity costs.

For instance, if you invest $100,000 to establish a business and gained $120,000 in profit then your accounting profit would be $20,000. Economic profit would put in implicit costs; like the opportunity cost of $50,000 should you have been employed in its place during that particular period. As shown by this, you would have an economic loss of $30,000 i.e. $120,000 - $100,000 - $50,000).

 


Related Discussions:- Accounting profit

Illustration of standard error of estimate , Illustration of Standard error...

Illustration of Standard error of estimate The production manager of XYZ Company is concerned about the apparent fluctuation in efficiency and wants to determine how labour cos

Explain the categories of the activity cost drivers, Explain the categories...

Explain the categories of The activity cost drivers The activity cost drivers can broadly be classified into following three categories: 1) Transaction drivers: for exampl

What is the issue price for bond a and b, Q. What is the issue price for Bo...

Q. What is the issue price for Bond A and B ? On December 31, 20x7, the Jill Corporation issued $20,000,000 of 15 year face value bonds. The bonds pay interest on June 30 and D

Problem 18.4A Process Costing with No Beginning or E, Ask question Toll Hou...

Ask question Toll House makes chocolate chip cookies. The cookies pass through three production processes: mixing the cookie dough, baking, and packaging. Toll House uses process c

Bank guarantees, Bank guarantee is one of the facilities which the commerci...

Bank guarantee is one of the facilities which the commercial banks extend in support of their clients in favour of third parties who will be the beneficiaries of the guarantees. In

Determine the objectives of ratio analysis, Objectives of ratio analysis ...

Objectives of ratio analysis 1) Measuring the profitability: we can measure the profitability of the business by calculation gross profit net profit expenses ratio and other.

Transactions involves spot exchange, Identify whether each of the following...

Identify whether each of the following transactions involves spot exchange, contract, or vertical integration. For the last item if the contract length is optimal or suboptimal.

FIFO, I WANT TO KNOW THE RULES FOR DOING LIFO AND FIFO

I WANT TO KNOW THE RULES FOR DOING LIFO AND FIFO

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd