Concepts of Income

Objectives

1. Compare and contrast economic and accounting concepts of income.
2. Consider the link between concepts of income and the measurement issues of matching versus asset/liability perspectives.
3. Examine the objectives for calculating income.

prepare a 2-3 page, double-spaced paper to explain the two concepts of income (i.e. economic and accounting) in your own words. What approach do you think is appropriate for use in financial statements? Support your opinion with a rational argument.