Tag Archives | Income

Source of Income of a Country

In this article we will discuss about the source of income of a country:- 1. Connecting Factors for the Tax Objects 2. Basic Source Rules 3. Taxing Source Rules 4. Conflicts in Source Rules. Connecting Factors for the Tax Objects: The connecting factors for the tax objects are the source rules. The source rules identify: […]

Procedure of Computing Accounting Income: 4 Steps

The following points highlight the four main steps involved in procedure of computing accounting income. The steps are: 1. Defining the Particular Accounting Period 2. Identifying Revenues of the Accounting Period Selected 3. Identifying Costs Corresponding to Revenues Earned 4. Matching Principle. Step # 1. Defining the Particular Accounting Period: Accounting income refers to the […]

Comprehensive Income: Concept, Components and Advantages

In this article we will discuss about Comprehensive Income:- 1. Concept of Comprehensive Income 2. Components of Comprehensive Income 3. Advantages. Concept of Comprehensive Income: Comprehensive income, also known as all-inclusive concept of income, is the change in equity (net assets) of an entity during a period from transactions and other events and circumstances from […]

Advantages and Limitations of Accounting Income

In this article we will discuss about the advantages and limitations of accounting income. Advantages of Accounting Income: (1) Accounting concept of income has the benefit of a sound, factual and objective transaction base. Accounting income has stood the test of time and therefore is used by the universal accounting community. (2) Another argument in […]

5 Important Recipients of Net Income

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 […]

Accounting Income and Economic Income

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 […]

Limitations of Economic Income

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 […]

Top 3 Concepts of Income (With Measurement)

The following points highlight the top three concepts of income. The concepts are: 1. Accounting Income 2. Economic Income 3. Capital Maintenance Income. Concept # 1. Accounting Income: Accounting income, often referred to as business income or conventional income is measured in accordance with generally accepted accounting principles. The profit and loss account or income […]

Conversion of Accrual Basis Income to Cash Basis Income

In this article we will discuss about the conversion of accrual basis income to cash basis income. The profit and loss account focuses on net income determination from operating activities. However, it does not show cash inflow and outflow relating to operating activities because the profit and loss account is prepared on accrual basis. In […]

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