Income
Income comprises increases in assets or decreases in liabilities that increase equity, other than contributions from holders of equity claims. It includes revenue from ordinary activities and other gains. Accrual accounting determines when income is recognised; receiving cash does not by itself establish income. Distinguishing income from owner financing and liabilities is essential to measuring profit correctly.
Worked example
A $2,000 service supplied on credit creates income and a receivable; a $2,000 cash loan receipt instead creates a liability.
Common mistake
Income is broader than cash receipts and broader than sales revenue; shareholder investment is not income.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| FIA | FFA | Direct | September 2026–June 2027 |