Which of the following statements is incorrect about financial capital concept?
A) The general price level accounting system follows financial capital concept.
B) Capital is calculated as total assets less total liabilities.
C) Profit is earned after an entity's capital is sufficient to maintain the operating capability of the entity's assets.
D) Capital is determined as the purchasing power of equity recorded.

Question

Quizplus · Accepted Answer

The statement is incorrect because profit is earned after an entity's capital is sufficient to maintain the financial capital, not specifically the operating capability of the entity's assets.

Which of the Following Statements Is Incorrect About Financial Capital