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

Multistage decision making under risk, Multi-stage decision making under ri...

Multi-stage decision making under risk (The use of decision trees) Sequencing is concerned with the selection of an appropriate sequence or order of performing a series of jobs

Cost advantage and value chain , Cost Advantage and Value Chain Cost a...

Cost Advantage and Value Chain Cost advantage is one of the two types of competitive advantage a firm may possess. Cost is also of vital significance to differentiation strate

Questions., how long will it take to get answers after question are submitt...

how long will it take to get answers after question are submitted

Accounting exam, hello do your staff help with exams ?

hello do your staff help with exams ?

Advantages-limitations-dynamic programming, Advantages and Limitations of D...

Advantages and Limitations of Dynamic Programming Advantages: (1) In certain types of problems such as inventory control management, Chemical Engineering design, dynamic

Seasonal variations and size of business, Seasonal Variations : Commodities...

Seasonal Variations : Commodities along with seasonal demand results in raised level of working capital requirement. It could be offset through scaling down operations throughout t

#, Describe the important role that the corporate level strategy has in rel...

Describe the important role that the corporate level strategy has in relation to the development of the business and functional strategy in a multi -business organization

What is direct material cost variance, What is Direct material cost varianc...

What is Direct material cost variance It can be defined as the difference between the standard costs of direct material specified and the actual cost of direct material used.

Explain why the preparation of the budget, Question: (a) The demand for...

Question: (a) The demand for the output of a certain company is very elastic and modern plant recently installed is capable of greatly increased production. Output at present

Deferred tax assets and liabilitie, Prepare a multiple step income statemen...

Prepare a multiple step income statement, and classified balance sheet for XYZ Corporation for 2013 in good form. The income statement should include the proper earnings per share

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