Question

Which one of the following statements about income is correct?

Group of answer choices

Income may arise when there is control over the increase in economic benefits.

Income may arise from the recognition of an increase in the value of assets.

Income can be in the form of decreases of liabilities.

Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims.

Answer 1

Option (d) is correct. Income is increases in economic benefits during the accounting period in the form of enhancements of assets or decreases of liabilities which result in increases in equity, other than those relating to contributions from holders of equity claims.

Option (a) is incorrect. Income may arise when there is increase in economic benefits.

Option (b) is incorrect. Income do not arise from the recognition of an increase in the value of assets because increase can be due to various reasons.

Option (c) is incorrect. Income cannot be in the form of decreases of liabilities.

Answer is d. Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims.