The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Income

Collection:: Economics Books

134 NATURE OF CAPITAL AND INCOME [Cmar. VIII A little consideration will show that if we credit the servants with the services of cooking and waiting, and debit them with wages as a distinct item, we must debit the food with their services of cooking and waiting. If we prefer to drop out these services both from the credit side of the servants’ account and the debit side of the food account, we are then at liberty to omit the category of servants entirely, and to leave only the charge of their wages against the food. There are endless admissible modifica- tions of the accounting here described, many of which have practical advantages, but the preceding is pre- sented as a complete and detailed record of all income and outgo arranged by sources. § 7 In complete accounting we must not omit the negative items of property, or liabilities. The same principles apply here as for positive items, or assets. Items which are negative are such because they yield negative income, or outgo. If the lawyer whose accounts we have followed is in debt, the payments on his debt (whether “interest” or “principal’’) which he makes during the time-interval considered are outgo. On the other hand, if a debt is contracted during the time-interval considered, its pro- ceeds are for that period an addition to gross income. Thus an income-and-outgo account may always be com- pletely formed by recording the values of the services and disservices occasioned by all the articles of capital under consideration. In the case of an individual these articles of capital are his assets and his liabilities. No other items than the services and disservices mentioned can properly find a place in the accounts. We have already warned the reader against the fallacy of deducting from income any depletion of capital; he should also be warned against the opposite fallacy of adding to income any sav- ings of capital. This fallacy is so common and so subtle

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