The concept of capital maintenance is important for:

Question

Quizplus · Accepted Answer

The concept of capital maintenance is crucial for the measurement of profit because it ensures that profits are not recognized until the capital of the company is maintained or increased. This means that a company should only report a profit if its financial position at the end of a period is at least as strong as at the beginning, after excluding any distributions to, or contributions from, owners during the period.

The Concept of Capital Maintenance Is Important For