What question did this study set out to answer?

The research aims to clarify the nature and mechanisms involved in determining business income in financial accounting.

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April 1, 2026Open Access

Fundamental Logic of Periodic Income Determination of Financial Accounting

Key Points

The research aims to clarify the nature and mechanisms involved in determining business income in financial accounting.
Analyzed existing theories on income determination
Reviewed literature on cost-revenue matching
Examined the role of business activities in income generation
Identified lack of consensus on income's nature and determination
Highlighted the transformation from original to artificial business activities
Proposed a theoretical framework to address income determination challenges

Abstract

Until now business income has been a most fundamental concept in accounting, where the principle of matching cost with revenue has been the central feature of double-entry book keeping system. It is, however, quite obvious that now there is little agreement among researchers and CPAs regarding (1) the nature of income, (2) the structure and mechanism of income determination and (3) the essential elements of income determination. This study will focus on the importance of “business activities” in an enterprise which generates income as well as the transformation from original activities to artificial ones so as to theoretically solve these complex problems.

Fundamental Logic of Periodic Income Determination of Financial Accounting

Key Points

Abstract

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