Accounting profits are calculated based upon:
A) explicit cash receipts and implicit expenditures of cash.
B) actual cash receipts and actual expenditures of cash.
C) implicit cash receipts and actual expenditures of cash.
D) opportunity costs plus explicit costs.

Question

Quizplus · Accepted Answer

Accounting profits are calculated based on the actual cash receipts and actual expenditures of cash. It does not take into account any implicit costs, opportunity costs, or non-cash transactions. It only focuses on the cash inflows and outflows of the business during a specific period.

Accounting Profits Are Calculated Based Upon