National Income

The national income is defined as the total prize of all the services and goods produced within a country asset income coming from abroad in a specific time period usually one year (yr).

National Income Accounting

The national income is an amount of a nation's economic productiveness. Associated amounts of the productivity of an economy are GNP (gross national product), NNP (net national product), private profit, per capita income and liquid income. The above statistics are calculated from taxation instructions, government report and other sources (reservoirs).

The national income measures the income value of the flow of production of services and goods produced within a saving over a time period.

Income earned by a country's people including investment of capital and labor.

The national income accounting or economic arithmetic serves many functions. This makes it possible to graph trade cycle to study a country's economic development and to figure it is material standard of life. It's an important instrument in helping to shape economic policy. Though the concepts described in this content apply specifically to America, a few nations now make related calculations of their total national income (profit).


Types of National Income

The two major types of national incomes are:

1. Gross National Product
2. Net National Product

The Gross National Product

The Gross National Product (GNP) is the total prize at current market value of all services and goods produced within an economic system. 1 process of obtaining this project is to add the market price of all final services and products sold to consumers (customer), business concern and government during the year (yr). Actuaries use the costs of products at the last of production to avoid calculating raw materials and the cost of intermediate auctioning more than one time. Because these prices are promptly in stock, the GNP is a convenient indicator of the gross production of an economic system.

The Net National Product

The Net National Product (NNP) is a more exact indicator of services and goods available to the economic system.

For computing in Gross National Product no allowance is worked the value of equipment that merely puts back machinery and other capital commodity that have exhausted during the year (yr). And this factor known as depreciation (wear and tear) is deducted from GNP to determine net national product (NNP).

Next Chapters

Single Entry Accounting
Depreciation Dividends in Accounting
Double Entry Accounting
Cash Book
Discount Assets
Ledger in Accounting
Final Accounts
Liability Debenture
Journal Entry
National Income
Trial Balance Payroll Accounting
Drawings in Accounting
Petty Cash Book
International Trade Admission of a Partner
Book Keeping
Bill of Exchange  

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