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 I. Capital

Collection:: Economics Books

68 NATURE OF CAPITAL AND INCOME [Cuar. V also include, if exhaustively considered, the person of the owner himself. The owner may be either an individual human being, or a collection of human beings, such as a family, an asso- ciation, a joint stock company, a corporation, or a govern- ment. With respect to a debt or liability, the person who owes it is the debtor and the person owed is the creditor. Every item in a capital account is an element of the owner's total capital, the assets being positive elements and the liabilities being negative. Consequently, the alge- braic sum of the elements of capital, or the difference in value between the total assets and the total liabilities, is the net capital, or capital-balance indicated in the account. § 2 The items in a capital account are constantly changing, and their value also, so that when, after one statement of assets and liabilities is drawn up, another is constructed at a point of time six months later, the balancing item, or net capital, may have changed considerably. However, book- keepers are accustomed to keep the item “capital” intact from the beginning of their account, and to denominate any increase of it as “surplus” or “undivided profits.” There are several reasons for this. In the first place, the less often the bookkeeper’s entries are altered, the simpler the bookkeeping. Again, by stating separately the original capital and its later increase, the books show at a glance what the history of the company has been as to the accumu- lations of capital. Finally, in the case of joint stock com- panies, the capital is represented by stock certificates, the engraved “face value” of which cannot conveniently be altered to keep pace with changes in real value. Conse- quently it is customary for bookkeepers to maintain the book value of the “capital” equal to the face value of the certificates.

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