Fundamentals of Accountancy, Business, and Management (FABM) 2 Practice Exam

In taxation, cash or property flowing into the taxpayer is called income. Income encompasses wages, interest, dividends, rents, gains, and other resources received or realized by the taxpayer, and it can appear as cash or in the form of property (in kind). It represents the broad inflows that taxpayers receive during the tax year before any deductions or exclusions are applied. Concepts like gross income and taxable income are more specific: gross income is the total all-source inflow before deductions, while taxable income is what remains after allowable deductions and exemptions. A tax, on the other hand, is the amount owed to the government, not the inflow itself. So the best fit for “cash or property that flows into the taxpayer” is income.