Explain the meaning of gain and profit distinguish between these two terms
Answers
Explain the meaning of gain and profit. ... Here, the sale of the old machinery is an irregular activity; so, the difference is termed as gain Thus, in other words the only difference between profit and gain is that profit is the excess of revenue over expense and gain arises from other than operating transactions.
The difference between Profit and Gain is stated below:
Explanation:
In terms of Accountancy,
Profit of a company can be defined as the net income obtained by the company by selling the products which it is producing. In mathematical terms, it can be defined as the difference between the total amount of money earned by the company by selling its products and the amount of money invested (expenditure) by the company for producing the product.
Gain can be defined as any additional amount of money that is credited to the company for performing a financial transaction that does not involve the products produced by the company. It can be obtained by selling an asset of the company, like a machinery, at a price which is more than its cost price, that is, the price at which the company had purchased the machinery.