NORMAL PROFIT Definition

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NORMAL PROFIT is the opportunity cost of using entrepreneurial abilities in the production of a good, or the profit that could have been received by entrepreneurship in another business venture. Like the opportunity costs of other resources, normal profit is deducted from revenue to determine economic profit. It is, however, never included as an accounting cost when accounting profit is computed.

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CASH DIVIDEND is the payment of earnings to shareholders.

MONITORING is the evaluation of the firm’s system of quality control to provide reasonable assurance that it is designed appropriately and operating effectively.

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