As a general rule, when accountants calculate profit they account for explicit costs but miss:

Question

Quizplus · Accepted Answer

Accountants typically account for explicit costs such as wages, rent, and materials, but may miss implicit costs such as opportunity costs or the value of the owner's time and labor. Sunk costs are not typically included in profit calculations because they cannot be recovered, goodwill costs are subjective and can vary greatly, and operating costs are typically accounted for in profit calculations.

As a General Rule, When Accountants Calculate Profit They Account