Abstract The article discusses cash movements and periodic income determination. Conceptually, the determination of income is relatively simple. Income is produced as a result of business operations. The problem of accounting is not, however, the simple measurement of the difference between total revenue and total outlay over the life of an investment, but that of measuring the difference between revenues and expenses for a given segment of that life. Modern accounting breaks up a continuous stream of business activity into artificial segments known as accounting periods. This operation is designated as periodic income determination. This problem of periodic income determination is inseparably connected with that of property valuation. The understanding of the relationships between cash movements, income, and asset value does not, of course, immediately and automatically solve all the problems of profit measurement. The assumption that the value of the measuring unit remains stable is implicit in the foregoing discussion. The price-level problem is therefore an example of an important problem which remains unsolved. This problem concerns differences between real and monetary income and the maintenance of capital.
Reed K. Storey (Fri,) studied this question.