Economic Problems and Measuring Business Income

The following points highlight the six main economic problems of measuring business income. The Problems are: 1. Treatment of Cost 2. The Problem of Depreciation 3. The Treatment of Capital Gains and Losses 4. Accounting for Inflation 5. Profitability Measures 6. Predictability of the Future.   Problem # 1. Treatment of Cost: The first problem centres around the concept of cost. [...]