To Calculate Accounting Profit,one Takes the Difference Between

question 54

Multiple Choice

To calculate accounting profit,one takes the difference between

• A) total revenue and explicit costs.
• B) total revenue and fixed costs.
• C) implicit total revenue and the sum of fixed and variable costs.
• D) total revenue and the sum of fixed and variable costs.
• E) total revenue and the sum of explicit and implicit costs.

---

Definitions:

Equity Accounted Balance

A method of accounting whereby an investor recognizes its share of the profits and losses of its investee within its own financial statements.

Profit/(Loss)

The financial result of an entity's operations and activities, indicating income or deficit over a specific period.

Equity Method

An accounting technique used to record investments in other companies by recognizing the investor's share of the earnings of the investee.