Edwards & Bell’s Concept of Profit: An Empirical Analysis on the Basis of Historical Cost and Current Costing
Journal of Finance and Accounting
Volume 2, Issue 3, May 2014, Pages: 72-80
Received: May 16, 2014; Accepted: Jun. 3, 2014; Published: Jun. 10, 2014
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Author
Golam Mohiuddin, Institute of Education, Research & Training (IERT), University of Chittagong, Bangladesh
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Abstract
The measurement of income occupies a central position in accounting. Income measurement is probably the most important objective and function of accounting, accounting concepts, principles and procedures used by a business enterprise. In general, income represents increase in wealth and success of business; the higher the income, the greater will be the success of a business. The theory of business income as developed by Edgar O. Edwards and Philip W. Bell is a classic treatise. It has attained a reputation as a major contribution to the accounting literature. In the book “The theory and measurement of business income” the authors made to classify the methodological approach in developing the theory of business income, knowledge of how a particular work fits within the array improves our understanding of the evaluation of accounting theory. They have suggested that the central objectives toward which accountants should point in formulating measures of a business income. The general theory of profit maximization by the individual firm provides a simplified picture of the decision-making process under conditions of uncertainty, the process which must be evaluated with the aid of accounting data. They have reconciled economic income and accounting income with considering price level adjustments. An attempt has been taken in this study to clarify these concepts of profit on the basis of historical cost and current costing.
Keywords
Profit, Historical Costing, Current Costing, Business Profit, Accounting Profit
To cite this article
Golam Mohiuddin, Edwards & Bell’s Concept of Profit: An Empirical Analysis on the Basis of Historical Cost and Current Costing, Journal of Finance and Accounting. Vol. 2, No. 3, 2014, pp. 72-80. doi: 10.11648/j.jfa.20140203.16
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