![]() ![]() Receive personal income from social insurance programs thatĪre not connected with producing the current gross national product.ĭisposable personal income is the amount of personal income that remainsĪfter an individual's taxes have been paid. Received by entities other than individuals, and (2) some individuals Personal income differsįrom national income in two important aspects: (1) some national income is Wages, transfer payments such as sick pay or vacation pay, and theĮmployer's contribution to Social Security. Personal income includes all payments received by individuals, including Transfer payments to employees not on the job. Of government enterprises (such as the U.S. Percent of national income includes such items as depreciation or capitalĬonsumption allowances, indirect business taxes, subsidies less surpluses Is involved in producing the gross national product. Includes all compensation paid to labor and for productive property that Proprietors and professionals, and corporate profits. ![]() Indirect business taxes, capital consumption allowances, incomes of These include employee compensation, rental income, net interest, In looking at the economy as a whole, economists view gross national Income and is equal to the total value added through activities that haveĬontributed to the production of the entity's goods and services. The total value of these claims represents the entity's gross Salaries, investors receive interest payments for their investment, and Have a claim against those goods and services. Rendered by the entity, workers, investors, the government, and others That is, when goods are produced and services are In looking at an entity as a whole,Įconomists define its gross income as the total value of all claimsĪgainst its output. While accountants measure a single company's income for a specificĪccounting period, economists are concerned with the aggregate income forĪn entire industry or country. ![]() The Internal Revenue Code also provides for exclusionsĪnd exemptions as well as for nontaxable types of income to arrive at the Many of the items that the Internal RevenueĬode defines as income and that are called income on tax form 1040 areĪctually revenues, such as dividend income, investment income, and Such an increase in cash does not increase owners' equity, though,īecause there is also an increase in the company'sįor personal income tax purposes, gross income is money received by an For example, aĬompany may increase its cash account by taking a Is not the same as a company's cash receipts. In an increase in owners' equity, then it becomes clear that income In owners' equity due to transactions and other events andĬircumstances from nonowner sources. Since revenues increase owners' equity in a company, and expensesĭecrease owners' equity, income can also be defined as the increase Much different than a company with net income of $1 million. Refer to revenues as income, for a company with revenues of $1 million is It is easy to confuse the two through improper usage. When looking at a company's income statement, it is easy toĭistinguish between revenues, which appear at the top of the statement,Īnd net income, which appears at the bottom. Or revenues include salaries, rent, utilities, Other expenses that are typically deducted from sales In that example theĬompany's revenue is $300, its expense is $200, and its net income Merchandise, for which it originally paid $200. For example a store may sell $300 worth of Thus, revenues are the opposite of expenses, and income equals Income or profit is determined by subtracting its expenses from its Monetary measure of outputs, or goods sold and services rendered, withĮxpense being a monetary measure of inputs or resources used in the Another way of defining a company's revenue is as a AĬompany's revenue is all of the money it takes in as a result of In each field the concept of income is definedįor accounting purposes, income is distinguished from revenues. ![]() National income, personal income, disposable personal income, and money To measure a company's income for a given accounting period.Įconomists are concerned with measuring and defining such concepts as ![]()
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