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 financial performance of the firm [...]
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 non-owner sources. It includes all [...]
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 [...]