Which statement best defines income concepts?
A)Revenues and expenses are more consistent with the capital maintenance concept to income measurement than with the transactional approach.
B)The capital maintenance approach to income measurement relies on historical cost.
C)The capital maintenance approach to income measurement is the approach used in accounting today.
D)The transactional approach to income measurement is applied using the accrual basis of accounting.

Question

Quizplus · Accepted Answer

The statement that best defines income concepts is that the transactional approach to income measurement is applied using the accrual basis of accounting. The other statements contain inaccuracies or false information. The capital maintenance approach to income measurement does not rely solely on historical cost but also considers the changing purchasing power of money over time. Additionally, the capital maintenance approach is not the only approach used in accounting today; the transactional approach is also widely accepted. Therefore, option D is the best choice.

Which Statement Best Defines Income Concepts