What Is National Income Accounting?

National income: National income refers to the value created by workers in the material production sector in a certain period of time. The remaining part after deducting material consumption from the total social output value is national income. National income (value form) = total social output value -Consumed means of production or national income (physical form) = total social products-Consumed means of production ·

National income accounting

Right!

It reflects the whole

There are three measures

Seven related aggregates and relationships in national income accounting

GDP

Net domestic product NDP

Net domestic product NDP refers to the net value of the final product produced by a country (or region) on its territory within a certain period of time in terms of market value.

NDP = GDP depreciation

GNP

GNP is the gross income earned by a country's permanent residents (known as nationals). It differs from GDP in that it includes income earned by nationals abroad, not income earned by foreigners in the country.

Net National Product NNP

NNP is the gross national income (GNP) of a country's residents minus depreciation.

National income NI

National income NI refers to the total income transferred by residents of a country in the production of goods and services.

NI = wage + interest + rent + profit = NNP (indirect taxgovernment subsidies to enterprises) company transfer payments

Personal income PI

Personal income PI is the sum of all income received by individuals in a country over a period of time.

Personal income = national income-corporate profits-social insurance tax-net interest + net interest + government transfers to individuals + personal interest income ^[1]

Personal disposable income PDI

Personal disposable income PDI refers to the total income that a country can dispose of within a certain period of time.

PDI = PI-Individual income tax and non-tax payments (such as fines, etc.) ^[1]

General accounting method

National income is calculated at market prices and is the final result of production activities of all resident units in a country (region) within a certain period. It has three manifestations, namely price, income and product. In terms of value form, it is the difference between the value of all goods and services produced by all resident units in a certain period over the value of all non-fixed asset goods and services invested during the same period, that is, the sum of the added value of all resident units; Looking at it, it is the sum of the initial distribution income created by all resident units within a certain period of time and distributed to resident units and non-resident units; in terms of product form, it is the final goods and services minus imported goods and services.

In actual accounting, there are three calculation methods, namely production method, income method (also called distribution method) and expenditure method. The calculation methods for the three methods are:

(Production method) = total output-intermediate input (material product input + service input)

(Income method) = Workers' compensation + fixed asset depreciation + net production tax + operating surplus

(Expenditure Method) = Total Consumption + Total Investment + Net Exports of Goods and Services = (Resident Consumption + Government Consumption) + (Total Fixed Capital Formation + Inventory Increase) + (Exports of Goods and Services-Import of Goods and Services)

Because of the difference in access, the calculation results of various methods will of course differ.