Current accounting practice takes the viewpoint of shareholders by reporting the amount of net income available to shareholders after subtracting from revenues all expenses incurred in generating the revenue by claimants (for example, employees, lenders, governments) other than shareholders.

Question

Quizplus · Accepted Answer

Current accounting practice does report net income available to shareholders after deducting all expenses incurred in generating revenue by other claimants. This is because shareholders are the owners of the company and therefore have a direct interest in the company's profitability.

Current Accounting Practice Takes the Viewpoint of Shareholders by Reporting