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

Ska. 2] CAPITAL ACCOUNTS 69 The following two balance sheets will show the accu- mulation of “surplus.” January 1, 1900 Assets Liabilities Plant « « + « « $200,000 Debts ve wee 03 100,000 Capital . . . . . 100,000 $200,000 ; $200,000 JANUARY 1, 1901 Plant, ete. . . . . $246,324 Debts ele e le ert i8100,000 Capital iis iu ove 2100000 Surplus... an 46,324 $246,324 $246,324 But not only is the book item, capital, maintained intact as long as possible, but often the surplus also is put in round numbers and kept at the same figure for several succes- sive reports. All the smaller fluctuations have an effect simply on a third item called “undivided profits.” The distinction between surplus and undivided profits is thus merely one of degree. The three items — capital, surplus, and undivided profits — together make up the present net capital. Of this, “capital” represents the original amount, “surplus” the earlier and larger accumulations, and “un- divided profits” the later and minor. The undivided profits are more likely to appear in dividends, that is, to become divided profits, although this may also happen to the surplus, or even in certain cases to the capital itself. We see, then, that the capital of a company, firm, or person is to be understood in two senses; first, as the item entered by the bookkeeper under that head, — the original capital; and, secondly, this sum plus surplus and undivided profits, — the true net capital at the instant under consideration. Inasmuch as the stock certificates were issued at the formation of the company and cannot be perpetually changed, they ordinarily correspond to the original instead

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