Income is best described as which statement?

• A. Money received to the business from sales. This may be from physical goods or services
• B. Costs incurred by the business
• C. Assets owned by the business
• D. Loans owed to the bank

Answer: (A)

Income is the money a business earns from its ordinary activities, mainly by selling goods or providing services. It represents the inflow of economic benefits and increases the business’s equity, coming from customers as payment for what the business offers. In practical terms, income includes money received from customers for goods sold or services performed, whether paid immediately or billed and collected later. This reflects earnings from core operations rather than outside sources of funds. The other statements describe different concepts: costs are expenses that reduce profit, assets are resources owned by the business, and loans owed to the bank are liabilities. So income best matches money received from customers for goods or services.