Income
Income is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.[1]
Definition[edit | edit source]
For households and individuals, income is the sum of all the wages, salaries, profits, interest payments, rents, and other forms of earnings received in a given period of time.[2] For firms, income generally refers to net-profit that is, what remains after operating expenses, interest and taxes are subtracted from gross revenue.[3]
Types of Income[edit | edit source]
Income can be categorized into two types:
- Active Income: This is the income earned by performing a service. This includes wages, tips, salaries, commissions, and income from businesses in which there is material participation.[4]
- Passive Income: This is the income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.[5]
Income Distribution[edit | edit source]
Income distribution is how a nation’s total GDP is distributed amongst its population.[6]
Income in Different Disciplines[edit | edit source]
In different disciplines, the term income has different meanings:
- In economics, income distribution is the smoothness or equality with which income is dealt out among members of a society.[7]
- In personal finance, income is what is received as a wage or salary and is either consumed or saved.[8]
- In accounting and taxation, income is the increase in wealth that an entity has from its activities.[9]
See Also[edit | edit source]
- Gross income
- Net income
- Disposable income
- Personal income
- Household income
- Income inequality
- Income tax
References[edit | edit source]
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
- ↑ https://www.wikimd.com/wiki/Income
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Contributors: Prab R. Tumpati, MD