Financial Accounting

Chapter 8

Measurement of Business Income

LEARNING OBJECTIVES

After studying this chapter, you will be able to

1. Understand the Meaning of Business Income.

2. Know the Important Definitions of “Income”

3. Understand the Terms “Revenues” and “Expenses”

4. Understand the Meaning of “Measurement of Business Income”

5. Measure Business Income by Computing the Increase in Owner’s Capital – Net Worth Method

6. Measure “Net Income” or “Net Profit”

7. Measure “Net Income” by Applying the Principle of “Matching of Incomes and Expenses” Method

8. Understand the Terms “Income and Expenses” and Other Inherent Elements Associated with These Terms

9. Compare “Net Worth Method” with “Matching Costs Against Revenue Method”

10. Understand the Procedure for “Measurement of Business Income” ...