Which of the following statements is correct A Economic prof

Which of the following statements is? correct?

A.

Economic profit takes into account all costs involved in producing a product.

B.

Accounting profit is not relevant in preparing the? firm\'s financial statement.

C.

Economic profit always exceeds accounting profit.

D.

Accounting profit is the same as economic profit.

Solution

Since economic profit consider explicit as well as implicit cost. It means it takes into account all costs which has been incurred during production.

On the other hand, accounting profit consider only explicit cost. So it\'s profit is more than the economic profit.

Hence option A is the correct answer.