Income is measured as:
A) A flow only.
B) A stock only.
C) Both a flow and a stock.
D) Neither a flow nor a stock.
Answer: A) A flow only.
Income is flow concept which implies that income as a variable is a pooled value arrived at as a result of an accumulation of certain amount realized in given period say weekly, monthly, quarterly or yearly. Income has a close resemblance to a stock but differs in that its physical concept is unlike a stock since it is not a quantity at a fixed point in time, but rather a continuous flow of earnings, wages, or revenues produced in a given timeframe. He also defined the income of persons as wages, salaries, and self-employment income which a person receives during a given period. To non-accounting majors, income is the amount of money made from the sale of goods or services for a particular business in a certain period, deducting the amount spent on these goods or services during the same period. Income is not a stock item because income unlike any physical item is not something that can be valued at a particular point in time but is the measure of accumulation of wealth during a particular period.
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