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

How much must you deposit each year to reach your goal, Right now you are 2...

Right now you are 20 years old and you have decided that you want to have $2,000,000 in the bank when you turn 65 years old. How much must you deposit each year to reach your goal

Preparation of comparative balance sheet, Problem From the following ba...

Problem From the following balance sheets of Dramas Ltd., compute the trend percentages using 31st December 2005 as the base year. Assets & Liabilities

What specifically caused your emotional response?, What story or character ...

What story or character in a story generated what Aristotle calls a "catharsis?" Describe your emotional response. What specifically caused your emotional response?

Advantages-disadvantages-imposed budgets, Advantages of Imposed budgets ...

Advantages of Imposed budgets Advantages: They increase the probability that the organization strategic plans are incorporated into the planned activities. They

Define material usage variance, Material usage variance Difference amon...

Material usage variance Difference among standard quantity of material and actual quantity used is the material usage variance. This variance arises due to: Economic use of

Cost, Stellar Packaging Products and its primary customer, Estrella Coffee,...

Stellar Packaging Products and its primary customer, Estrella Coffee, are deciding on appropriate costing systems for their operations. Stellar Packaging Products’ manufacturing is

Credit period, It refers to the length of time given to the buyer to pay fo...

It refers to the length of time given to the buyer to pay for their purchases. Throughout this period no interest is charged on the excellent amount. The credit period usually vari

Assgnment, 1. Calculate the manufacturing costs for the year. 2. Prepare a ...

1. Calculate the manufacturing costs for the year. 2. Prepare a statement of cost of goods manufactured. 3. Prepare an income statement (assume an income tax 25%)

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