What is the difference between profit and gain

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These cookies will be stored in your browser only with your consent. Sign in. Log into your account. Forgot your password? Password recovery. Recover your password. Get help. Please enter your comment! Please enter your name here. You have entered an incorrect email address! Profit and gain are two terms that should be distinguished correctly as these have very different meanings in accounting.

The treatment for these two also significantly varies in nature. The key difference between profit and gain is that profit is the total earnings for a period whereas gain is an economic benefit derived by disposing an asset above its net book value or market value. Overview and Key Difference 2. What is Profit 3.

What is Gain 4. Side by Side Comparison — Profit vs Gain 5. In simple accounting terms, profit can be summarized as the summation of total income less total expenses.

Thus, it is the actual earnings of the company. Who is the creditor and state the amount payable to him? What are the expenses? What is the gain he earned? What is the loss he incurred? Who is the debtor?

What is the amount receivable from him? What is the total amount of expenses and losses incurred? Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner.

Explain the need for drawing up the special purpose books. Briefly state how the cash book is both journal and a ledger. A bank reconciliation statement is mainly prepared for: a Reconcile the cash balance of the cash book. Define the purpose of maintaining subsidiary journal.

What entry debit or credit would you make to: a increase revenue b decrease in expense, c record drawings d record the fresh capital introduced by the owner.