Answer: Accounting profits ignore implicit costs; economic profits consider them.
Explanation: In simple words, implicit cost refers to the cost of choosing the best alternative and loosing the profit that one could have earned by choosing the second best alternative.
Accounting profit is the revenue that one has left with after compensating for explicit cost but economic cost also takes into consideration the implicit one.
When an investor performs an investigation while considering the acquisition of a property, this is referred to as Due diligence.
<h3>what is
Due diligence?</h3>
The systematic analysis and reduction of risk associated with a business or investment decision are known as due diligence.
Any stock can be thoroughly investigated by an individual investor utilizing easily accessible public information.
Numerous additional investment types can be made using the same due diligence method.
A company's financials are examined, compared over time, and benchmarked against rivals as part of due diligence.
Numerous other situations call for due diligence, such as checking a prospective employee's background or reviewing customer feedback.
In order to lower risk exposure, due diligence is primarily used. The procedure makes sure that each party understands the specifics of a transaction before agreeing to it.
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It is termed as Income Summary account.
<h3>Income summary account </h3>
The income summary account is a temporary account into which all income statement revenue and expense accounts are transferred at the end of an accounting period. The net amount transferred into the income summary account equals the net profit or net loss that the business incurred during the period.
The income summary account is recorded by debiting revenue accounts and crediting expense accounts. The balances of the transferred amounts should match with the net income or loss for the year.
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The main difference between them is that real GDP is adjusted for price changes that caused by either inflation (which will increase price of products) or Deflatio (which will lower price of products).
<span>Nominal GDP on the other hand, is calculated at current market value without considering both inflation and deflation. </span>
