In this article we will discuss about operating and non-operating activities of business. Operating activities are the central means by which the enterprise is expected to obtain income and cash in the future. Results of central, continuing operations, therefore, have a different significance from results associated with other non-recurring activities and events. No definition of the term operations is likely [...]
The following points highlight the top two approaches to income measurement. The approaches are: 1. Transactions Approach to Income Measurement 2. Activities Approach to Income Measurement. Approach # 1. Transactions Approach to Income Measurement: The transactions approach in income measurement records changes in asset and liability valuations only as these are the result of transactions. The term transactions is used [...]
The following points highlight the top three concepts of capital maintenance in an enterprise. The concepts are: 1. Financial Capital Maintenance 2. General Purchasing Power Financial Capital Maintenance 3. Physical or Operating Capital Maintenance. Concept # 1. Financial Capital Maintenance: Financial or money capital maintenance pertains to the original cash invested by the shareholders in the business enterprise. According to this concept [...]