Income

Income is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.<ref>https://www.wikimd.com/wiki/Income</ref>

Definition

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.<ref>https://www.wikimd.com/wiki/Income</ref> For firms, income generally refers to net-profit that is, what remains after operating expenses, interest and taxes are subtracted from gross revenue.<ref>https://www.wikimd.com/wiki/Income</ref>

Types of Income

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.<ref>https://www.wikimd.com/wiki/Income</ref>

• 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.<ref>https://www.wikimd.com/wiki/Income</ref>

Income Distribution

Income distribution is how a nation’s total GDP is distributed amongst its population.<ref>https://www.wikimd.com/wiki/Income</ref>

Income in Different Disciplines

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.<ref>https://www.wikimd.com/wiki/Income</ref>

• In personal finance, income is what is received as a wage or salary and is either consumed or saved.<ref>https://www.wikimd.com/wiki/Income</ref>

• In accounting and taxation, income is the increase in wealth that an entity has from its activities.<ref>https://www.wikimd.com/wiki/Income</ref>

See Also

• Gross income
• Net income
• Disposable income
• Personal income
• Household income
• Income inequality
• Income tax

References

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Income

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