Which of the following approaches to income measurement underlies financial accounting and reporting?
A) Transaction approach
B) Economic approach
C) Valuation approach
D) Physical capital maintenance approach

Question

Quizplus · Accepted Answer

Financial accounting and reporting relies on the transaction approach, which focuses on recording and reporting actual transactions that have occurred in a standardized manner. This approach emphasizes the reliability of financial information and ensures that transactions are properly recorded and reflected in financial statements. The economic approach, valuation approach, and physical capital maintenance approach are other methods of income measurement that are not typically used in financial accounting and reporting.

Which of the Following Approaches to Income Measurement Underlies Financial