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 ele- 
ments in the income and outgo accounts of that capital. 
We are now in a position to apply the foregoing defini- 
tions 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 cal- 
endar year 1900. The income which this capital brings 
in to its owner may be either a money rental or the serv- 
ices 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 pay- 
ments 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 “out- 
come” or “yield” (in German, ertrag). Similarly, when the farmer