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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)
What else can I help you with?
What is wash account?
Account of a Service Beaureau (Employer) with a Bank used to make wash transactions (profit/loss are equal). In other words it can be also defined as a bank's internal account which comes under the category range of Nostro account. So literally wash account is a sub-account of Nostro account.
Is a Trial Balance extracted from the balances in the Profit and Loss Account true or false?
False. A Trial Balance is extracted from the balances in the general ledger accounts, not directly from the Profit and Loss Account. It lists all the debit and credit balances to ensure that total debits equal total credits, serving as a preliminary check before preparing financial statements. The Profit and Loss Account itself is derived from the revenue and expense accounts in the general ledger.
Net income plus operating expenses is equal to gross profit?
gross profit
What effects the gross profit?
Gross profit or gross margin is equal to:Sales less: Costs of Goods Sold
Is profit equal to the amount of cash collected by an entity?
No, profit often includes cash, but it rarely the entire quantity. Profit is usually the combination of liquid and non-liquid funds.
Is economic profit equal to accounting profit?
no
What is wash account?
Account of a Service Beaureau (Employer) with a Bank used to make wash transactions (profit/loss are equal). In other words it can be also defined as a bank's internal account which comes under the category range of Nostro account. So literally wash account is a sub-account of Nostro account.
Is a Trial Balance extracted from the balances in the Profit and Loss Account true or false?
False. A Trial Balance is extracted from the balances in the general ledger accounts, not directly from the Profit and Loss Account. It lists all the debit and credit balances to ensure that total debits equal total credits, serving as a preliminary check before preparing financial statements. The Profit and Loss Account itself is derived from the revenue and expense accounts in the general ledger.
Net income plus operating expenses is equal to gross profit?
gross profit
Why is the equality of marginal revenue to marginal cost essential to profit maximuzation in all of the market structures?
When Marginal Cost is below Marginal Revenue, profit is increasing. When Marginal Cost is above Marginal Revenue, profit is decreasing. Since the goal of firms is to maximise profit, they should produce at a level where the MR of producing another unit is equal to the Marginal Cost of producing another unit. Firms should keep producing until this point because there is a hidden profit in MC. This is because we are not taking into account the Accounting profit.
What effects the gross profit?
Gross profit or gross margin is equal to:Sales less: Costs of Goods Sold
How do you increase gross profit when sales increase but gross profit does not?
Your mariginal revenue must equal your marginal cost.
Is profit equal to the amount of cash collected by an entity?
No, profit often includes cash, but it rarely the entire quantity. Profit is usually the combination of liquid and non-liquid funds.
What causes the net profit for the year note to equal the net cash inflow?
Net profit refers to the book profits made by an enterprise after accounting all incomes & expenses. This includes both cash & non - cash items like depreciation which does not involve any cash outflow. Net cash inflow refers to the actual cash received by the enterprise during the year. The only cause that net profit will equal the net cash inflow is if the Profit & loss account records only the receipts during the year & excludes all expenses both cash & non-cash.
Is EBIT equal to operating profit margin?
Its normally EBITDA and yes it is.
What is Net income divided by net sales is equal to?
Profit Margin
Is contribution is equal to profit?
No, contribution is not equal to profit. Contribution refers to the amount remaining from sales revenue after variable costs have been deducted, which contributes to covering fixed costs and generating profit. Profit, on the other hand, is the remaining amount after all costs, both variable and fixed, have been subtracted from total revenue. Thus, while contribution is a component of the profit calculation, they are distinct concepts.
