1. The total profit of the enterprise refers to the total income. Deduct total expenses (salary, project cost, office cost, tax, etc.). From the perspective of total income, net profit may be negative;
2. The total profit of an enterprise is already the value of the total income minus the total expenditure, so this may be because the tax is collected according to the total income, and this part of the expenditure exceeds the total profit.
Second, modern enterprises are linked by profit accounting. As an independent economic entity, enterprises should offset their expenditures with their own income and provide investors with certain investment income.
The amount of income realized by an enterprise is one of the main factors that determine its profit level, which is an important symbol to measure the production and operation achievements of an enterprise in a certain period, and it determines the income of investors. Therefore, strengthening the accounting of income and profit is of great significance for correctly reflecting the operating results and distribution of enterprises and determining the income of investors.
Extended data:
In the view of income, the total profit is a foreign income and expenditure item and a pre-adjustment item; However, in the income statement, many countries still list the profits (normal profits) and other gains and losses (abnormal profits) generated in the current operating process separately before calculating the total profits (or accounting income).
normal profit
The so-called normal profit refers to the profits generated and realized by the production and operation activities of enterprises, including the profits realized by enterprises engaged in production, sales and investment announcement activities, as well as the normal profits of operating profits and investment income.
excess profit
Abnormal profits refer to the gains and losses arising from matters unrelated to the production and business activities of enterprises, including losses caused by natural disasters, fines and late fees, and other matters unrelated to business activities. China's previous regulatory adjustments were also included in abnormal profits.
Due to normal profits and business activities, it can be controlled by the enterprise management department, but abnormal profits are uncontrollable; Therefore, it is more objective and accurate to divide profits into normal profits and abnormal profits (that is, to list them separately in the income statement) to measure the management efficiency of enterprise management departments.
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