In accordance with the Conceptual Framework, income includes both:
A) gains and losses.
B) returns and profits.
C) revenue and gains.
D) gains and profits.

Question

Quizplus · Accepted Answer

According to the Conceptual Framework, income is defined as increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. This includes revenue and gains, but not necessarily profits (which include both revenue and expenses). Therefore, choice C is correct as it includes both revenue and gains, which are both considered components of income. Choices A, B, and D are incorrect as they do not include revenue, which is a key component of income.

In Accordance with the Conceptual Framework, Income Includes Both