The profit for all layman only remains to be the concept of deficit of expenditure incurred during the year over the receipts of the firm. The accounting profit may also lead to the understanding of surplus of revenue receipts and capital receipts over the capital expenditure and revenue expenditure. But it is even misleading for the owner to assume that the accounting profit is a situation of profit
The decision to take the profit as the profitable situation for the organization is highly impractical for various implicit and explicit costs tend to reduce the profit to further extent. The implicit costs are the costs whose value cannot be ascertained for these are not incurred to Mae payments for the self-owned inputs. The implicit costs are ignored as well as the concepts of opportunity costs are ignored to a great extent. The opportunity costs of ignoring the next best decision is taken care of under the concepts of the economic profit that further gets reduced as compared to the accounting profit.
However, the calculation of economic profit is an impractical approach but it is wise to understand the concepts of economic profit because the decision making process is made efficient. Only the qualified and the cheapest accountants provided by www.thecheapaccountant.co.uk canunderstandthis concept really well andhelp the owner of the business firm to take reliable and wise decisions than before. The cheap accountants are those who further help the owner to reduce the explicit costs, and thus increase the amount of accounting profit, enough for the business to cover the economic loss or economic costs of the business firm. The business firms are thus directed towards safe and secure directions where a highly successful business prospect awaits their arrival very early. And hence the profit is for the business firms for sure.