Revenue income Flashcards
Cash Sales
Cash sales are sales in which the payment obligation of the buyer is settled at once. Cash sales are considered to include the following forms of payment: Bills. Coins.
Credit Sales
Credit sales are payments that are not made until several days or weeks after a product has been delivered.
A credit sale is payed later.
Rent Recieved
A business that owns property and charges others for use of all or part of that property will receive rent as their main source of income. If a business owns a house and rents out three rooms, then it will receive rent from each of these renters. Similarly, a business may own land or offices which it rents out to other businesses.
Commission Recieved
A business may sell products or services as an agent of another business. They sell another business’s products on their behalf and, for each sale they make, they get paid a percentage on that sale. This percentage is called commission .
Interest Received
Interest received is money earned on savings or lending. If, for example, a business has a positive bank balance it will receive interest on this. This acts as revenue coming into the business. Equally a business may lend money to another person or business. Interest will be charged to the lender and the business lending the money will receive interest as a form of revenue.
Discount Received
Discount received is when a business is given a percentage off a sale, normally in return for quick payment or a bulk order. This reduces the costs to the business. Personal and Business Finance
Revenue income
As you have already seen, capital income is the money invested in the business to set it up or later buy additional assets; it is a long-term investment. Revenue income is the money that comes into the business from performing its day-to-day function – selling goods or providing a service. The nature of the revenue income depends on the activities that the business does to bring in money.
