122 NATURE OF CAPITAL AND INCOME [Cmae. VIII

the owner receiving it.! This twofold aspect of income is
expressed in accounts by regarding the farm as “in account
with’’ its owner. All income from it to him is placed on one
side of the ledger and is said to be “credited” to the farm,
while its outgo is, in like manner, “debited.” A credit
item, then, signifies income which is yielded by a given
capital, and a debit item signifies outgo which it occasions.
The terms refer respectively to positive and negative elements
 in the income and outgo accounts of that capital.
We are now in a position to apply the foregoing definitions
 to income accounts. We begin by imagining a “house
and lot” as an article of wealth or capital, and shall first
consider its income and outgo during the period of the calendar
 year 1900. The income which this capital brings
in to its owner may be either a money rental or the services
 of shelter for himself and family. In either case the
income may be measured in money, although in the case of
"occupancy by the owner this measurement requires a special
appraisement. We shall suppose that the house was built
many years ago and in 1900 is nearly worn out. It yields
an income worth $1000 a year. Against this income there
are offsets in the form of repairs, taxes, ete.; for these payments
 are “undesirable events’ occasioned by the house
and lot. We have, then, the following “income account’ :

Income ror House AND Lor puriNgG YEAR 1900

Income Outgo
Use of house and lot . . $1000 Repairs . . . . . . $200
axes... i. wv no 10D
Insurance . . .-. «+ 100
$1000 $400

The net income is therefore $600.

! The terms income and outgo are somewhat unfortunate, as,
etymologically, they suggest the relation to the owner Smith rather
than to its source, the farm. Smith’s income is the farm’s “outcome”
 or “yield” (in German, ertrag). Similarly, when the farmer