In the transactions approach to income determination,income is measured by subtracting the expenses resulting from specific transactions during the period from revenues of the period also resulting from transactions.Under a strict transactions approach to income measurement,which of the following would not be considered a transaction?
A)Sale of goods on account at 20 percent markup
B)Exchange of inventory at a regular selling price for equipment
C)Adjustment of inventory in lower of cost or market inventory valuations when market is below cost.
D)Payment of salaries

Question

Quizplus · Accepted Answer

The adjustment of inventory in lower of cost or market inventory valuations is an accounting adjustment, not a transaction involving an exchange or transfer of goods or services.

In the Transactions Approach to Income Determination,income Is Measured by Subtracting