The nature of capital and income

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Multivolume work

Identifikator:: 1892063557

Document type:: Multivolume work

Author:: Lamprecht, Karl http://d-nb.info/gnd/118569015

Title:: Deutsche Geschichte

Place of publication:: Berlin

Publisher:: Gaertner

Year of publication:: 1891-

Collection:: Economics Books

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Volume

Identifikator:: 1892072033

URN:: urn:nbn:de:zbw-retromon-239036

Document type:: Volume

Author:: Lamprecht, Karl http://d-nb.info/gnd/118569015

Title:: Neueste Zeit

Volume count:: Abt. 3

Place of publication:: Berlin

Publisher:: Weidmann

Year of publication:: 1907

Scope:: XIV, 516 S.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Multivolume work

Structure type:: Chapter

Title:: Erstes Kapitel. Neue Anschauungen von Staat und Gesellschaft

Collection:: Economics Books

CHAPTER VI CAPITAL SUMMATION §1 TreE interdependence of the balance sheets of different firms or companies which has been revealed by the com- munication of bankruptcies exists, of course, irrespec- tive of bankrupteies. It exists wherever any item enters two accounts, in one as asset and in the other as liability. In fact, every liability item in a balance sheet implies the existence of an equal asset in some other bal- ance sheet, for every debtor implies a creditor. Conse- quently every negative term in one balance sheet is offset by a corresponding positive term in some other. The con- verse, however, does not follow, namely, that every asset implies a liability. When we attempt to sum up the items in the bal- ance sheets of various persons, the positive and negative elements may be canceled out by pairs or couples. This method of cancellation may be called the method of couples. Each debt or liability between any two persons whose accounts are included, being a liability to one and an asset to the other, constitutes a couple or pair of equal and opposite items. We have already noted another way in which liabilities may be canceled against assets, namely, by subtracting the liabilities in any capital account from the assets in the same account. This method may be called the method of balances, since for each individual account liabilities are deducted from assets and the net balance is taken. Both methods must, of course, lead to ‘he same result. 90

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