The following points highlight the five important recipients of net income. The recipients are: 1. Value-Added Concept of Income 2. Enterprise Net Income 3. Net Income to Investors 4. Net Income to Shareholders 5. Net Income to Residual Equity Holders. Recipient # 1. Value-Added Concept of Income: Broadly speaking, it is possible to view the and other investors but also [...]
In this article we will discuss about the differences and similarities between accounting income and economic income. Difference between Accounting Income and Economic Income: The following are the differences between accounting income and economic income: 1. Accounting income is an income resulting from business transactions arising from the cash-to-cash cycle of business operations. It is derived from a periodic matching [...]
In this article we will discuss about the limitations of economic income. Economic income has several difficulties. In fact there is no agreement as to the meaning of "better offness" that occurs in specific time periods. Also, this term is not well defined in case of business enterprises. The greatest problem lies in measuring the net assets at the beginning [...]