What is accounting profit?

Accounting profit is a company's total earnings, calculated according to generally accepted accounting principles (GAAP). It includes the explicit costs of doing business, such as operating expenses, depreciation, interest, and taxes. Accounting profit shows the amount of money left over after deducting the explicit costs of running the business.

What is the difference between accounting profit and economic profit?

Because of its comprehensiveness, accounting profit is a more reliable indicator of overall results than the gross profit or operating profit figures. Accounting profit is revenues minus the expenses mandated by an accounting framework, while economic profit is revenues minus the opportunity costs of the assets being used.

What is the difference between accounting profit and gross profit?

The concept does not include opportunity cost, which would be included in the more comprehensive (and theoretical) economic profit concept. Accounting profit is revenues minus all expenses, while gross profit is revenues minus just the cost of goods sold.