Income refers to the total inflow of economic benefits formed by enterprises in their daily activities, which will lead to the increase of owners' equity, and has nothing to do with the capital invested by owners. Profit refers to the inflow of economic benefits formed by non-daily activities of enterprises, which will lead to the increase of owners' rights and interests, and has nothing to do with the capital invested by owners. The essential difference between the two is that income refers to the formation of enterprises in their daily activities, while profit refers to the formation of enterprises' non-daily activities.

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

Second, the difference between profit and loss.

1. Profit is the operating result of entrepreneurs, the comprehensive reflection of the operating effect of enterprises and the concrete embodiment of their final results. Profits are not only of the same quality, but also of the same quantity. The only difference between profit and surplus value is variable capital, and profit is total cost.

2. Loss refers to the net outflow of economic benefits caused by non-daily activities of the enterprise, which will reduce the owner's equity and has nothing to do with the distribution of profits to the owner. Specifically, it refers to losses and other losses caused by force majeure factors such as inventory shortage, damage and scrapping of fixed assets and inventory, loss of transferred property, loss of bad debts, loss of bad debts and natural disasters.

Extended data:

According to the authoritative sources of the Ministry of Finance, the main reason for the adjustment of the definition of accounting elements is that six accounting elements, such as assets, liabilities, owners' equity, income, expenses and profits, were redefined in the Regulations on Enterprise Financial Accounting Reports issued by the State Council in 2000, replacing the provisions on the definition of accounting elements in the original basic standards. This part of the revision of the basic standards is carried out in full accordance with the "Regulations on Financial Accounting Reports of Enterprises" and is the core part of the revision of the basic standards.

In addition, the concepts of "profit" and "loss" in international standards are introduced into the "profit" element. Profit is not the income of operating income, but a part of profit, such as the income from the disposal of fixed assets. Loss is not an expense, but it will reduce the profit of the enterprise, such as the loss or damage of fixed assets. Many foreign countries regard it as an independent accounting element, namely "gain" and "loss". Because China's "Enterprise Financial Accounting Reporting Standards" stipulates that there are only six accounting elements, but these two concepts are very important, so they are reflected in the "profit" element of the revised draft.

References:

Accounting Standards for Enterprises-Basic Standards-China Net