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,...
Accounting profit accounts only for the actual profit and loss in your company. (Includes depreciation as well) and it is what accountants use, without taking into account implicit costs. Economic...
First of all, we need to understand what is explicit cost and implicit cost. Explicit cost mean real expenses, while implicit cost mean opportunity cost. In accounting profit, we only minus explicit...
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.
You could sell merchandise and make a profit. If the customer has not paid you yet, you have not increased cash. You have increased accounts receivable.