Abstract This article seeks the role of capital and income in economics and accounting. Examination of a sample of current accounting literature discloses a much divided opinion as to the relationship between economic and accountancy concepts and theory. The general attitude of accountants seems to be that the economic concepts may be valid in their own field, but they can't be adopted and applied to accounting purposes. It should be observed that the close contact of accountants with the bard realities of business has made more difficult for them the task of formulating logical and consistent concepts for their own use. But, surely it is the highest duty of both accountants and economists, while meeting the legal and practical demands of the moments, to point the way towards true economic conceptions in the law instead of merely passively submitting to its sometimes blundering dictation. The primary and central problem of business and hence of accounting and finance, will always be income. Economists and accountants agree that income is something related to capital.
Frank A. Fetter (Mon,) studied this question.