Question

When determining Accounting profit (as we define it), implicit cost

are not considered.
True or False

Answer 1

The answer is True.

Step-by-step explanation:

Accounting profit is the difference between total revenue and explicit costs. Explicit costs are the actual monetary payments made by a company for resources such as wages, rent, utilities, and materials.

Implicit costs, on the other hand, are the opportunity costs of using resources owned by the firm. These costs are not reflected in the accounting records of the company but are considered when calculating economic profit.

In determining accounting profit, implicit costs are not considered, so the answer is true.

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