INCOME ACCOUNTING

1. NATIONAL INCOME
ACCOUNTING
VALUE ADDED METHOD
SHYAM SUNDARYADAV
P.G.T. ECONOMICS
JNV MOULI, PANCHKULA
HARYANA

2. NATIONAL INCOME
Money value of all the goods and services
produced in a country during a financial year

3. CIRCULAR FLOW

4. FROMTHE CIRCULAR FLOW
@The sum total of income generated in the economy.
@The sum total of expenditure on the final goods
and services produced in the economy.
@The sum total of value added in the economy.

5. VALUE ADDED PROCESS
STAGE PRODUCER VALUE OF
OUTPUT(Rs)
INTERMEDIATE
CONSUMPTION(Rs)
VALUE
ADDED(Rs)
1. FARMER 600 200 400
2. FLOUR MILL 800 600 200
3. BAKER 1000 800 200
4. SHOPKEEPER 1200 1000 200
TOTAL 3600 2600 1000

6. VALUE OF OUTPUT
It refers to market value of the goods (or services) produced by
a firm during an accounting year.
VALUE OF OUTPUT=SALE
If entire output of the year is sold during the year

7. IF SOME OUTPUT REMAINS UNSOLD DURING THE YEAR
VALUE OF OUTPUT=SALE+CHANGE IN STOCK
CHANGE IN STOCK
It measured as the difference between ‘Closing stock’ and
‘Opening stock’ of the accounting year.
ΔSTOCK Closing
stock
Opening
stock

8. CALCULATION
VALUE
ADDED
VALUE
OF
OUTPUT
INTERMEDIATE
CONSUMPTION
GVAMP
GrossValue Addition
at Market Price

9. GVAMP OUTPUT
SALE Δ STOCK
INTERMEDIATE
CONSUMPTION
PURCHASE
DOMESTIC EXPORT DOMESTIC IMPORT
GDPMP
EXP
ORT
DOME
STIC
DOMESTIC IMPORTΔ STOCK