Migration and business cycles

The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 1736236210

URN:: urn:nbn:de:zbw-retromon-111544

Document type:: Monograph

Author:: Jerome, Harry

Title:: Migration and business cycles

Place of publication:: New York

Publisher:: National Bureau of Economic Research

Year of publication:: 1926

Scope:: 256 S.

Digitisation:: 2020

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VIII. The influence of economic conditions in the countries of emigration

Collection:: Economics Books

Sec. 9] INCOME SUMMATION 161 income is credited (B). In like manner all the transactions involving a payment or receipt of cash are entered on one side with respect to the cash, and on the opposite side with respect to some other capital source. The category of the capital source called “rights to and obligations from employees ”’ yields a certain amount of clerical work and other services appraised at $1500. This item credited (H) to the above-named source is here debited (h) to the stock of goods, to sell which requires the services of these employees. It may be that it should be debited to the store which they clean, or to some other article of capital on which they do work; but in any case it must be debited under some head or heads. It will be seen that among the other items of capital which are sources of income or outgo are the bonds and stocks of the company. The bonds absorb $800 of in- terest, and the capital-stock, which is a residual claim on the company, absorbs any surplus of cash which it is decided to distribute in dividends. The two sides of the account of such a fictitious person necessarily balance. It cannot be otherwise, even if the company accumulates its profit instead of paying it to the shareholders; for, as has been seen, the money thus received is debited to the cash account. In practical accounting, the items would usually be sim- plified somewhat. It would not ordinarily be worth while to make an appraisement of the value of the use of the ware- house for storage as distinct from the storage charge, nor of the value of the work performed by the employees as distinct from the wages paid them. In the above accounts we have purposely distinguished these magnitudes, estimating the storage benefit as $1000 though the rent paid for it is $1200, and estimating the work done by employees as worth $1500 though their wages were $1600. If, instead, we estimate the storage benefit at the rent figure and the employees’ work at the wages figure, our accounts would contain four M

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