Profit can be described as the money one has left over after all costs have been paid. For example, if you buy an apple for $2 and sell that same apple for $3, you have made $1 profit.
No economic profit is not always less than accounting profit; However, if accounting profit is less than economic profit the business would exit the industry.
Profit that is made by superb accounting. By using the accounting trade, money is saved that would have been lost without it. However I am supposed to reach 150 characters.
Accounting profit is simply the bottom line of a business income statement and is an absolute number, whereas an entrepreneurial profit uses the economic concept of opportunity cost. It is the profit that the entrepreneur would have earned if he or she had invested both time and money in some other enterprise.
Accounting profits tend to be higher than economic profits as they omit certain implicit costs, such as opportunity costs.For example, if you invest $100,000 to start a business and earned $120,000 in profit, your accounting profit would be $20,000. Economic profit would add implicit costs, such as the opportunity cost of $50,000 should you have been employed instead during that period. As such, you would have an economic loss of $30,000 ($120,000 - $100,000 - $50,000).
Accounting statements provide financial details concerning the operation of a business or other form of organization.
The opposite of profit in terms of integers is loss. While profit represents a positive financial gain, loss represents a negative financial outcome. In integer terms, if profit is a positive integer, loss would be its negative counterpart. For example, if a profit is +100, the corresponding loss would be -100.
In a way profit could be considered an asset but its a stretch. Profit is term used to describe the earnings left over after you subtract the expenses related to the earning of that profit. The retained earnings would actually be the asset. The term profit is just a way to tell if your business is making money (or profitable) and doesn't really fall into the asset category. You will not see profits on a balance sheet rather you will see earnings.
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If you are looking to get into either a finance or accounting field, profit and loss statements would be of critical value. Take a look at: en.wikipedia.org/wiki/Profit_and_Loss
How else would you know what costs really were and where they were incurred, and hence how to charge a price that produced a profit?
If drawings are shown as expenses then it will reduce the current year's profit while it will overstated the capital of company as well.
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