Abstract The distinction between realized and unrealized income is a familiar one to accountants. The distinction in fact is such a vital one that income which is not realized is not generally considered to be income at all. At the present time the problem of income is more in the foreground of the accountant's horizon than ever before. In view of the immediate significance of income it seems strange that such a crucial question as the test of realization should so generally have escaped critical discussion. The test of realization most generally applied is that of sale. This is a convenient test which is readily understood in the great majority of cases by most people concerned. However in view of the great importance attached to the test and of the absurdities which it causes in a few cases, a study of the sale as the dominant criterion for income realization should prove fruitful. While the sale is a convenient rule-of-thumb test, in some ways it represents a rather low stage of development of a streamlined concept of income.
Russell Bowers (Sun,) studied this question.