This is complicated.

Generally, we think profit is the total return we have left after the capital, and other expenses have been deducted. However, economic profit is different from accounting profit. The difference between the total cost and the total revenue, leaving out the value of the opportunity is what is referred to as the accounting profit; while economic cost, on the other hand, is the difference between the total cost and the total revenue without excluding the cost of the opportunity.

Accounting profit is also known as the net income of an organization. It is the difference between the total monetary revenue generated and the total monetary cost. In simple terms, it is the money left after deducting the cost and expenses (such as rent, wages, and material costs) of running the organization. Accounting profit is determined by generally accepted accounting principles (GAAP).

When you don\'t have more understanding about some business terms, you are very liable to misinterpret those terms. What most people know about profit is actually the gain an investor generated after a successful transaction. Some don\'t know there are other types of profit like accounting and economic profit. However, both terms are not the same. Accounting profit is a type of profit you have after deducting the total cost from the total revenue, without adding the values of those things you lose in a bid to acquire something else.