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

What procedure are followed in kaizen costing, What Procedure are followed ...

What Procedure are followed in kaizen costing In brief kaizen costing involves setting a new cost reduction target every month. The difference between the target profits and th

Factors influencing working capital requirements, The working capital needs...

The working capital needs of a firm are influenced by many factors. The important ones are as follows: Nature of business: The working capital necessity of a firm is closely l

Determine the cash flow budget - monthly cash disbursement, where can I get...

where can I get the solution for the question on this link: http://www.expertsmind.com/questions/determine-the-cash-flow-budget-monthly-cash-disbursement-30145416.aspx I have att

Transfer pricing with third party consequences, Transfer pricing with third...

Transfer pricing with third party consequences Transfer prices are used not only for internal record keeping and performance evaluation purposes. There are several settings

Determine the cost according to normality, Determine the cost according to ...

Determine the cost according to normality According to normality: under this category cost may be categorized as follows: Normal cost: it is the cost which is normally i

Breakeven point, A company manufactures a one product. Estimated cost data ...

A company manufactures a one product. Estimated cost data regarding this product and other information for the product and the company are as follows: Sales price per unit Rs.2000

Manufacturing cost, what are the different arguments against direct materia...

what are the different arguments against direct materials, direct labor, and factory overhead

The role of computers in simulation, The Role of Computers in Simulation ...

The Role of Computers in Simulation Computers can be used to: 1) To generate the random numbers 2) To simulate thousands of trials. This is done extremely fast, accuratel

Working capital management, literature review of effects of working capital...

literature review of effects of working capital on financial performance?

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