The asset-liability approach is arguably superior to a revenue-expense approach to defining accounting elements.

Question

Quizplus · Accepted Answer

The asset-liability approach focuses on measuring financial position and the resources that an entity controls (assets) and the obligations to transfer resources to others (liabilities). This approach provides a more accurate picture of an entity's financial health compared to the revenue-expense approach, which emphasizes income measurement and ignores important information related to an entity's resources and obligations. Therefore, the asset-liability approach is considered superior to the revenue-expense approach.

The Asset-Liability Approach Is Arguably Superior to a Revenue-Expense Approach