What is the difference between profit and income? What is the difference between income and profit

Difference between profit and income:

1. The scope of the concept is different.

Difference Between Income and GainIncome in the broad sense contains gains, but gains are not the same as income in the narrow sense, and income is generated by daily activities. Revenue, such as the sale of goods, is recorded as a profit.

Profits are generated by non-ordinary activities, such as the provision of labor services, etc., while profits are generated by non-routine activities such as fixed assets, and profits are divided into two parts, one part is included in profits through non-operating income, and the other part is directly included in owners' equity.

2. The accounting treatment is different.

In accounting, the distinction between income and gains is a matter of presentation and reporting. Income and expenses are usually presented in gross amounts.

Gains and losses are usually presented on a net basis, i.e. gains are deducted from the relevant expenses and losses are deducted from the relevant gains. Gains and losses directly included in the owner's equity refer to the gains or losses that should not be included in the current profit or loss, will lead to an increase or decrease in the owner's equity, and are not related to the owner's capital investment or the distribution of profits to the owner.

3. Profits are usually obtained from occasional economic business, which belongs to the kind of income that can be obtained or never expected without going through the business process.

Extended information: According to the relevant provisions of the Accounting Standards for Business Enterprises - Basic Standards (2006):

1. Income refers to the total inflow of economic interests formed by the enterprise in its daily activities, which will lead to an increase in the owner's equity and have nothing to do with the owner's invested capital.

2. Profit refers to the inflow of economic interests formed by the non-routine activities of the enterprise, which will lead to an increase in the owner's equity and have nothing to do with the owner's invested capital.

It can be seen that the difference between income and profit lies in the nature of the business that generates income, the former arises from the daily activities of the enterprise, such as the main business, concurrent business, etc., and the latter arises from the non-daily activities of the enterprise, such as the disposal of fixed assets, donations, etc.

There are two types of profit scores, one is the gain directly included in the owner's equity, that is, the capital reserve (excluding the capital premium), and the other refers to the profit directly included in the current profit or loss, that is, the non-operating income.

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Simple tips for distinguishing income and profits!

1. The difference between income and profits.

Revenue refers to the owner's equity that is formed in the day-to-day activities of a business.

Increase、With the owner invested capital。

The total inflow of unrelated economic benefits. Profit refers to the inflow of economic benefits that are formed by the non-routine activities of the enterprise and will lead to an increase in the owner's equity, and are not related to the capital invested by the owner. The essential difference between the two is that income refers to the formation of the enterprise in its daily activities, and profit refers to the delay in the formation of the enterprise's non-daily activities.

For example, industrial companies manufacture and sell products, commodity distribution companies sell goods, insurance companies issue insurance policies, consulting companies provide consulting services, and software companies develop software for customers.

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2. The difference between profit and loss.

1. Profit is the business result of the entrepreneur, the comprehensive reflection of the business effect of the enterprise, and the concrete embodiment of its final result. Profits are not only qualitatively identical, but also quantitatively equal, and the only difference in profits is surplus value.

is for variable capital, and profit is for all costs.

2. Loss refers to the net outflow of economic benefits that are not related to the distribution of profits to the owners that occur due to the non-routine simple activities of the enterprise, which will lead to the reduction of the owner's equity. Specifically, it refers to the fixed assets incurred by the enterprise in its production and business activities.

and inventory loss, damage, scrapping loss, transfer property loss, and bad debts.

Losses, bad debt losses, natural disasters and other force majeure factors.

and other losses.

Here's how to distinguish income from gains:Income refers to the total inflow of economic benefits generated by the business in its daily activities that will lead to an increase in the owner's equity and are not related to the capital invested by the owner.

Profit refers to the inflow of economic benefits that are formed by the non-routine activities of the enterprise and eliminate the code industry, which will lead to an increase in the owner's equity and have nothing to do with the owner's invested capital.

Income is formed by the daily activities of the enterprise, while profits are formed by the non-daily activities of the enterprise, which is the essential difference between the two, and it is a very critical basis for judging whether the inflow of economic benefits formed by a transaction belongs to income or profits.

The broad sense of Bi split income contains profits, but profits and narrow income is not the same, income is generated by daily activities, and profits are generated by non-daily activities, such as sales of goods, provision of labor services, etc., and profits such as ** fixed assets and other non-daily activities generated by respect, income is recorded in profits, and profits are divided into two parts, one part is included in profits through non-operating income, and the other part is directly included in owners' equity.