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Accounting profit: is the difference between total revenue and cost accounting, and cost accounting are explicit costs and phenomenon. Economic profit: is the difference between total revenue and the economic cost, and the costs Alaguetsadah.chml accounting costs and implicit costs that are not explicit, which is linked to the opportunity cost of the alternative. If the total revenue is greater than the economic cost it achieved an economic profit, and if the opposite were realized economic loss, but if the cost is equal to total revenue achieved economic profit accounting
Economic Profits are lower from the very beginning and tend to equalize with Accounting profits at a later stage.
Accounting profit is the difference between the total revenue and the total cost, excluding the cost of the opportunity. On the other hand, economic cost is the difference between the total revenue and the total cost, including the cost of the opportunity.
Economic profit is obtained when the revenue exceeds the opportunity’s cost. On the contrary, a firm can be said to have accounting profits if the revenue exceeds the accounting cost of the firm. In other words, accounting profit can be referred to as the revenue obtained by a firm after all the economic costs are met.
One of the differences that can be seen, is that the economic profit will always be lesser when compared to accounting profits. When compared to economic profit, the accounting profits are only given during leap years.
When considering accounting profits, it is defined as the revenue deducted from the explicit costs, and economic profits, as the revenue deducted from explicit and implicit costs.
When calculating accounting profits, the things that are considered include leased assets, non-cash adjustments/transactions for depreciation, provisions, allowances, and capitalising development costs. When calculating economic profits, several things, like opportunity costs, residual value, inflation level changes, tax rates, and interest rates on cash flow, are taken into account.
When compared to economic profits, accounting profit is calculated for a certain period of time.
Economic profit = total revenue -( explicit + implicit )cost
Accounting profit > economic profit
Accountingprofit = total monetary revenue- total costs.
Economic profit is the difference between total monetary revenue and total costs, but total costs include both explicit and implicit costs.
Economic profit includes the opportunity costs associated with production and is therefore lower than accounting profit.
Thank you for All & Agree with All
agreed with mr georgie and mr venkitaraman
Economic profit is the lower for simple reason that economic cost is the sum of explicit cost and opportunity cost so the economic cost is higher .
i agree for all answers .
this video contain more explanation
https://www.youtube.com/watch?v=06j_zPdPWOY
AGREE WITH MR VENKITARAMAN
Economic profit
Total revenue minus total cost, including both explicit and
implicit costs
Accounting profit
Total revenue minus total explicit cost
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