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What is "income"


Offshore Agent
Jan 6, 2009
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There seems to be some conflicting definitions of the word "Income".

Read it here

the financial gain (earned or unearned) accruing over a given period of time



(Earned or Unearned)????

Excess of revenues over expenses.

Read it here


Excess revenues?

Inflow of revenue during a period of time. (See net income.)

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Inflow of "revenue"? (#1 Definition of "Revenue" defined on Dictionary.com as: the income of a government from taxation, excise duties, customs, or other sources, appropriated to the payment of the public expenses.) ~ Income of a government???

a gain in money usually as a result of business or labor



A "Gain" in money.

And some other definitions that just don't seem to have a solid definition that clearly define what the word actually means.

What is your take on this?
Technically speaking, if I charge $10.00 per hour for labor and work for 10 hours. I would be paid $100.00. I lose 10 hours, and am compensated at the rate of $10.00 per hour in exchange for my labor.

This is a zero-gain exchange. How would this $100.00 be defined as "income" or "gain"?
Income is a business term that is appropriately looked at from an accounting point of view. All other references or uses of the word income are derived from the accounting definition and in many cases, where regular people use the term, it's used loosely. That being said, income is the excess of revenues over expenses.

Revenues being the monetary equivalent of payments you receive either for goods sold or services rendered.

Expenses being operating and other costs incurred necessary to make that revenue.
In the business sense, income is not only money but the right to collect money for goods ALREADY sold or services ALREADY rendered, minus the expenses you incurred to make the goods or the provide the service. That means your AR forms part of your Total receipts for income computation purposes, in the same way as advance payment for recurring expenses - if you make that - is not part of operating expenses for income computation purposes.

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