Accounting theory and practice pdf


This article is about accounting theory and practice pdf in accounting and business. Profit is a measure of profitability which is the owner’s major interest in income formation process of market production. There are several profit measures in common use.

Income formation in market production is always a balance between income generation and income distribution. The income generated is always distributed to the stakeholders of production as economic value within the review period. The profit is the share of income formation the owner is able to keep to himself in the income distribution process.

Profit is one of the major sources of economic well-being because it means incomes and opportunities to develop production. The words income, profit and earnings are substitutes in this context.