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

Carrying costs of inventory-relevant costs of eoq model, Carrying costs of ...

Carrying costs of inventory These are costs incurred because the firm has decided to maintain inventories. They generally consist of: •    Stock-out costs •    Insurance co

Invoice discounting or factoring, If a company creates sales to a number of...

If a company creates sales to a number of customers on credit terms this will have to wait for two or still three months before its debtors pay that they owe. It means that the deb

Finance, using the operating cycle and any other financial management knowl...

using the operating cycle and any other financial management knowledge,discuss the applicabilty of such cycle to poultry

Explain term contribution - contribution margin analysis, Contribution marg...

Contribution margin Analysis Contribution Contribution is the  difference between sales and variable cost or marginal cost of sales . if may also be defined as the excess

Break even analysis, I need an example on how to solve a single and two pro...

I need an example on how to solve a single and two product bundle

Cost, What are the limation of semi variable cost and how to overcome it?

What are the limation of semi variable cost and how to overcome it?

Standard costing .., the applicability of standard costing in modern manufa...

the applicability of standard costing in modern manufacturing environments in volatile environments

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