Economic profit will never exceed accounting profit. The accountant will calculate total cost using only explicit costs (basically a transfer of money) that the firm makes. On the other hand,
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what is the difference between reasonable profits and economic profits
Profits and losses are shared evenly Except otherwise stated in the contract.
According to this concept "expected losses are losses but expected gains are not gains". On the basis of this concept closing stock is valued at cost price or market price, whichever is lower. Provision for bad and doubtful debts are maintained.
Profits and losses are determined via the income statement. When you close out the books for the year that profit or loss gets closed and becomes part of the retained earnings. A loss would decrease retained earning and a profit would increase it. Loosely put, the retained earnings account is a cummulation of all the profits and losses over the years (not counting any other things that affect the bottom line like dividends paid out and such)
An accounting class would help you manage your books and check both profits and losses for your business. A general accounting course would just give you the basic principles.
The economic function of profits and losses is to determine the performance of a company. This is what will contribute to the overall measure of the economy in a region.
direct resources in response to changes in the economy
Profits = revenues - expenses
economic profits in a industry suggest the industry
greater then economic profits,as accounting profits do not include implicit costs
what is the difference between reasonable profits and economic profits
because they convey info about rewards people should anticipate experiencing by shifting resources from one activity to another
by gaining profits
Profits and losses are shared evenly Except otherwise stated in the contract.
A firm jointly owned and run by two or more people who share profits and losses is a partnership.
Yes
yes it is