Accounting profit, Managerial Accounting

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).

 

Posted Date: 7/27/2012 3:41:13 AM | Location : United States







Related Discussions:- Accounting profit, Assignment Help, Ask Question on Accounting profit, Get Answer, Expert's Help, Accounting profit Discussions

Write discussion on Accounting profit
Your posts are moderated
Related Questions
dentify and explain the many classsification of cost for planning,control,performance evaluation and decision making

Your financial advisor has recommended that you invest into your Roth Individual Retirement Account (Roth IRA) the sum of $5,000. If you put in $5,000 today, what will this investm

What is Programmer budgeting It is a combination of programming and systems refers to the activity and system analysis refers to cost benefit analysis or operations research. I


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

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

interest rates

Explain the techniques of performance budgeting It will also be useful to examine the three major aspects of this technique: Structural aspects : the structural aspects inv

What are the Advantages or uses of break even charts Computation of break even point or presentation of cost volume and profit relationship by way of break even charts has the

Controlling Things hardly go exactly as planned, and management should make a concerted effort to the monitor and adjust for their deviations. The managerial accountant is the