Question

State various components of operating surplus.

Answer 1

Components of Operating Surplus:

1. Income from Property:
   • Rent: Income from leasing land or buildings, including imputed rent of self-occupied houses.
   • Interest: Net interest received from lending to businesses or banks (excludes interest on government debt and consumer borrowings).
   • Royalties: Income from granting rights over natural resources, patents, and copyrights.
2. Income from Entrepreneurship: 
   • Corporation Tax: Tax on company profits (part of income earned before distribution).
   • Dividends: Profit distributed to shareholders.
   • Undistributed Profits: Retained earnings kept by firms for future investment (corporate savings).