Honeywell Inc. recently found itself in the odd position of having to teach Soviet bureaucrats a revolutionary new concept: profits and losses.

This basic lesson on capitalist economics came in the midst of high-level negotiations between Honeywell, a multibillion-dollar computer company, and the Soviet government for a joint project to modernize Soviet fertilizer plants. The negotiations are part of Soviet leader Mikhail Gorbachev's program to overhaul the stagnant Soviet economy by introducing modern technology and Western ways of doing business.

This new Soviet attitude, along with the likely signing of a new arms control agreement early next month, is expected to open unprecedented opportunities for American companies to do business in the Soviet Union.

Although trade is not expected to be a major issue during the summit, Gorbachev is planning to invite as many as 60 top business leaders for a two-hour meeting with him at the Soviet embassy while he is here to sign the agreement. Experts in trade with the Soviet Union expect him to emphasize the depth of his economic reform and how Western businesses can fit in.

"If the summit is a success I think the door will be opened for expanded trade," said Armand Hammer, chairman of Occidental Petroleum Corp., who has been cutting deals with the Soviets for 70 years. "I think the prospects are very good." Hammer just joined forces with Montedison SpA of Italy and Marubeni Corp. of Japan, signing a memorandum with the Soviets last week to build the biggest petrochemical complex in the Soviet Union. It will be one of the largest in the world.

But many pitfalls remain for American businesses considering the Soviet market, such as the problems of getting profits in Western currency out of Russia and the strict U.S. export controls over the sale of technology to the Soviets. Although President Reagan has supported an expansion of peaceful, nonstrategic trade with the Soviet Union since 1985, some members of his administration and conservative Republicans in Congress believe that doing business with the Soviets is wrong because it will strengthen their economy and thereby increase their military strength.

But Commerce Secretary C. William Verity, who has supported increased trade with the Soviet Union for 15 years since he ran Armco Inc., a steel and oil and gas conglomerate, said he believes increased trade is important in fostering a greater degree of trust between the two superpowers. Verity, a former chairman of the U.S.-U.S.S.R. Trade and Economic Council, a business group, ran into flak from conservative Republican senators during his confirmation hearings because of his views on trade with the Soviets.

He called Gorbachev "very courageous" for trying such radical economic reforms in the wake of opposition from entrenched bureaucrats and hard-line communists, two groups resisting change.

"I favor helping Gorbachev," said Verity. "If he can get more attention paid to consumer products, he will be forced to put more emphasis on the domestic side of the economy instead of the military. It will also get the Soviets to be a less closed, more open society and instill more of a market system in their country.

"It could lead to their entering the world the way the world is now instead of trying to change it to fit their philosophy," he said.

One of the most forward-looking of Gorbachev's economic reforms is a law that went into effect last January allowing Western companies to become partners with Soviet ministries in joint ventures.

A dozen such ventures have been arranged under the new law. Although only one is with a U.S. company, dozens more American firms are exploring the idea.

Viktor Mozolin, a professor of civil law from the Soviet Institute of State and Law, said in an interview here recently that joint ventures will give the country access to new management and production techniques.

"We don't want to abolish the central system but we want an indirect system of planning," said Mozolin. "Now, instead of an enterprise being told by the ministry how many bottles to make and at what price, there will be no price dictation to increase competition at the wholesale level." Prices for raw materials will still be set by the state.

"The joint venture will set the standard for the domestic market to meet world standards. It's a move to strengthen socialism by using a fundamentally different approach," said Mozolin.

It is precisely the strengthening of the Soviet economy that some in the Reagan administration and their conservative supporters fear. "A lot of people in this country don't feel we should do any business with the Soviet Union," said Verity.

He and the U.S.-U.S.S.R. Economic and Trade Council were attacked during his confirmation process by a conservative business group, the Business and Industrial Council, whose president, Anthony Harrigan, said, "It's absurd to spend hundreds of billions of dollars on defense while an organization promotes the sale of American hardware and technology to the Soviets -- often by companies that are key defense contractors.

"When the Soviets acquire such technology, we are forced to spend more on defense in an effort to maintain that qualitative edge that is our country's only security," he said.

Former Commerce undersecretary Lionel Olmer, whose 1985 visit to Moscow reopened commercial relations with the Soviets after a six-year hiatus brought about by the invasion of Afghanistan, said this view makes it difficult to increase trade with the Soviets.

"The United States has not yet come to grips with a fundamental issue: are we prepared to contribute directly or indirectly to the modernization of the Soviet economy? Or does the United States really think that it alone can delay the industrialization of the Soviet Union?" said Olmer, who now represents companies that are considering entering into a joint venture or other commercial dealing with the Soviets.

These questions frequently come to a head over the sale of technology that has both a military and civilian use. For example, a digital telephone switching system could be diverted to help improve defense communication, but it could also give Soviet citizens more freedom in communicating.

Beyond export constraints, a U.S. law tying trade to increased Jewish emigration hurts efforts to cut deals with the Soviets. Verity long has opposed that 1972 law, the Jackson-Vanik amendment, as having outlived its usefulness. He promised, though, that as Commerce secretary he would enforce it as long as it remains on the books.

Even without the U.S. legal restrictions, doing business with the Soviets is hard.

"They are impossible. The bureaucracy is so bad that even though you are an American company trying to make trade happen, it is so difficult," said Verity. "If they {Soviet bureaucrats} make a mistake, they don't get slapped on the wrist. They go to Siberia."

On top of all those problems, a deal can be washed away in a flash by a change in the political climate. After three years, eight months, and one day of negotiations, Armco signed a 23-volume, 8,000-page, $353 million contract for an electrical steel facility. The Soviets invaded Afghanistan 17 days later, and the contract was worth the price of waste paper as President Carter imposed trade sanctions on the Soviet Union.

The political risks, along with the other hurdles, have added to a "perception in the U.S. business community of the lack of profitability in the Soviet market," said James H. Giffen, president of the U.S.-U.S.S.R. Trade and Economic Council, who negotiated that deal for Armco.

Except in specialized sectors such as commodity sales, few American companies have made much money out of Soviet trade. Of about $2.75 billion in annual two-way trade between the countries, about $2 billion is American agricultural exports. Only about $100 million to $200 million of U.S. exports is machinery and equipment, and most of that is spare parts.

"We do more trade with Canada between 9 and 10 on a Saturday morning than we do in a year with the Soviet Union," said Kempton B. Jenkins, the Washington representative for Armco, and a former deputy assistant secretary of Commerce for East-West trade. Jenkins may get a senior position in the Commerce Department under Verity.

But American business executives say new opportunities to do business in the Soviet Union can give U.S. companies a foot in the door of a potentially huge market at a time when many Western European and domestic markets are saturated. Refusing to do business with the Soviets is also counterproductive, because if the United States doesn't, the Japanese, South Koreans and Western Europeans will, U.S. exporters say.

"The thing is, these people represent enormous markets and opportunities for these firms and if we deny them we will leave them to competitors in Europe," said Charles E. Hugel, president of Combustion Engineering Inc., a Connecticut petroleum engineering firm.

Combustion Engineering, which this month became the first U.S. company to conclude a joint venture agreement with the Soviet Union under the new law, will set up a company in Russia to install instrumentation and control systems at a petroleum refinery plant outside Moscow.

Hugel, who began dealing with the Soviets in the early 1980s, has his own five-year plan: a target of more than $200 million in sales by 1992 from the installation of the controls in many of the more than 200 such plants in the Soviet Union.

He is already salivating over the possibilities at the Ministry of Pulp and Paper. "We are talking about sensors, oxygen analyzers, instrumentation and applications software that can also be used for paper making," he said. "There is a severe shortage of quality paper in the Soviet Union."

The Soviet Union is clamoring for a vast array of basic consumer products, said Randy Bregman, director of the Soviet law program at the International Law Institute in Washington, which has arranged for specialists such as Mozolin to come to the United States. "It is a relatively advanced country with 280 million people that is now chomping at the bit to modernize and they have no consumer goods. We have and they need."

Other areas of Soviet interest include chemical and food processing, transportation equipment, telecommunications, improved electrical generating and transmission equipment, computers, medical equipment and hotels and tourist facilities.

At the same time, U.S. companies are interested in some innovative technology developed by the Soviets but never put to commercial use. "We're obviously interested in things like products that will serve the automotive and home construction market, pharmaceuticals and herbicides. The Soviets have technology in those areas and we are certainly interested in licensing the technology," said Michael A. Petrilli, manager of international development for Monsanto Co. The $7 billion diversified conglomerate is negotiating a joint venture with the Soviets to produce herbicides there.

The Soviets have shown surprising flexibility in negotiations with Western companies, although some rules -- such as the 51 percent ownership they demand in all joint ventures -- seem carved in stone, Western businessmen say. In the majority of cases, however, the Soviets have given American firms complete say in quality control and have visited companies here, like Combustion Engineering, to watch what they do.

"They are eager to learn about the general business philosophy of Western business companies, not only in the accounting realm but even more so in the idea of marketing and overall understanding of market forces for determining how to have a competitive advantage and also to establish pricing," said Jim Verrant, senior vice president of Honeywell International.

"In one of my first discussions with the Soviets I spent a good morning trying to explain the concept of a profit and loss statement and a balance sheet," he said. "When you get to the protection of intellectual property the Soviets have little idea as to those business concepts, but they have demonstrated a great deal of flexibility and willingness to learn and put into practice those approaches and regulations that are required."

But the question of hard currency still dogs joint ventures, which could be stymied by the difficulty in converting the Soviet ruble on world markets. While the Soviets see joint ventures as a way to meet their needs, Western companies want to know how they can take their profits home. Further problems may come as joint ventures start selling in other countries, causing U.S. companies already selling overseas to compete against themselves.

"We're certainly concerned about their need to generate hard currency because that forces the joint venture to be an exporter of some sort," said Monsanto's Petrilli. "At the same time we have no need for this herbicide being exported to Western markets because we're supplying those Western markets already."

Sarah Carey, a lawyer who helped Combustion Engineering negotiate its deal, said there are many different ways to solve these problems. "The problem is people think of simple sales: you give me a horse and I pay you cash. It isn't that kind of a deal at all. ... There are maybe 20 different ways" to get around the problem, she said.

These include buying goods from the Soviet Union with rubles from a joint venture and then selling them on world markets for hard currency; selling products and systems to the joint venture in exchange for hard currency; or taking payment in product, a form of countertrade. "We have to be resourceful and use ways to create profits abroad as well as within the Soviet Union," said Occidental's Hammer.

Combustion Engineering solved its problem by agreeing to take refined products such as gasoline, diesel oil and petrochemicals in exchange for its services and products. "Instead of having to develop hard currency we took their product as payment and we can then move that product to the West and get paid on a daily basis," said Hugel. "That was satisfactory." Combustion Engineering has in a sense modeled itself after the first joint venture between the United States and the Soviet Union, begun almost a decade ago.

Marine Resources Co. International -- a partnership between Bellingham Cold Storage Co. of Bellingham, Wash., and V/O Sovrybflot, a commercial corporation of the Soviet Ministry of Fisheries -- began operating in 1978. It has U.S. offices in Seattle and Dutch Harbor, Alaska, and Soviet offices in Moscow and Nahodka, a city in the far eastern part of the nation near Vladivostok.

MRCI contracts with independent American fishermen to pay them for catches from their grounds. The fishermen are paid in cash and the catches are delivered to Soviet processing vessels. MRCI is reimbursed for raw fish deliveries with Soviet processed fish products, which then are sold in the international market to generate hard currency. Thus MRCI partners deal primarily in barter.

These Byzantine arrangements are a touchy subject with virtually every American company negotiating a joint venture. "As far as the hard currency issue the key to solving that is flexibility on their side and creativity on our side," said Monsanto's Petrilli. "They are getting more flexible and we are getting more creative."