Accountants Include _____ in Calculating Accounting Profit

question 8

Multiple Choice

Accountants include _____ in calculating accounting profit.

• A) only implicit costs
• B) only explicit costs
• C) both implicit and explicit costs
• D) neither implicit nor explicit costs

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenues, indicating the company's financial performance over a specific period.

Trading Securities

Financial instruments bought and sold for the purpose of generating profits on short-term fluctuations in price.

Unrealized Gains

Profits that have been achieved on paper from investments but have not yet been sold for cash, and therefore are not reflected in the income statement.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest.