The following are the two statements regarding concept of profit. Indicate the correct code of the statements being correct or incorrect. Statement (I) : Accounting profit is a surplus of total revenue over and above all paid-out costs, including both manufacturing and overhead expenses.Statement (II) : Economic or pure profit is a residual left after all contractual costs have been met, including the transfer costs of management, insurable risks, depreciation and payments to shareholders sufficient to maintain investment at its current level.

Question

TuteeHUB · Accepted Answer

Both the statements are incorrect.

TuteeHUB · Answer

Both the statements are correct.

TuteeHUB · Answer

Statement (I) is correct while Statement (II) is incorrect.

TuteeHUB · Answer

Statement (I) is incorrect while Statement (II) is correct.

1.	The following are the two statements regarding concept of profit. Indicate the correct code of the statements being correct or incorrect. Statement (I) : Accounting profit is a surplus of total revenue over and above all paid-out costs, including both manufacturing and overhead expenses.Statement (II) : Economic or pure profit is a residual left after all contractual costs have been met, including the transfer costs of management, insurable risks, depreciation and payments to shareholders sufficient to maintain investment at its current level.
A.	Both the statements are correct.
B.	Both the statements are incorrect.
C.	Statement (I) is correct while Statement (II) is incorrect.
D.	Statement (I) is incorrect while Statement (II) is correct.
Answer» B. Both the statements are incorrect.

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