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- The difference between accounting loss and economic loss is12:
- Accounting income or loss recognizes realized gains and losses, and does not recognize unrealized gains and losses.
- Economic income or loss recognizes all gains and losses, whether realized or unrealized.
- When the related transaction is settled or completed, gains and losses are realized.
- An economic loss (negative economic profit) is incurred if total cost exceeds total revenue.
- Accountants include only explicit costs in their computation of total cost. Explicit costs include charges that must be paid for factors of production such as labor and capital, together with an estimate of depreciation.
Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.Accounting income or loss recognizes realized gains and losses, and does not recognize unrealized gains and losses. Economic income or loss recognizes all gains and losses, whether realized or unrealized. When the related transaction is settled or completed, gains and losses are realized.strategiccfo.com/articles/accounting/accounting-inc…An economic loss (negative economic profit) is incurred if total cost exceeds total revenue. Accountants include only explicit costs in their computation of total cost. Explicit costs include charges that must be paid for factors of production such as labor and capital, together with an estimate of depreciation.open.lib.umn.edu/principleseconomics/chapter/9-3 … - People also ask
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