The tax concept and economic concept of income are in agreement on which of the following:

Question

Quizplus · Accepted Answer

Both the tax concept and economic concept of income hold that income should be recognized in the year it is received or earned. Therefore, rent income for 2013 collected in 2012 should be included in income for 2012. However, the tax and economic concepts differ on the inclusion of the fair rental value of an owner-occupied home and the increase in value of assets held for the entire year. The tax concept includes these while the economic concept does not.

The Tax Concept and Economic Concept of Income Are in Agreement