Revenue
Define revenue.
Revenue is the inflow of resources to the business.
Selling and Distributive
General and Administrative
Financial
The formula or equation shown in the Income Statement is Assets = Liabilities + Owner's Equity.
False, Income - Expenses = Net Profit.
True or False:
Interest on an Asset, e.g. interest on term deposit (investment asset), is a revenue account.
True
Which Expenditure category does Petrol belong?
Selling and Distributive
Describe income statement.
A detailed report of Revenue and Expenditure accounts, for calculating net profit in a particular year.
Which side of the Accounting Equation is Revenue?
Credit (Right) side.
Expenditure accounts are recorded on the right side of the accounting equation. True or False.
True.
Which subheading is Advertising recorded in the Income Statement?
Selling and Distributive Expenses.
Name a business whose main source of revenue is "fees".
Any service business: Car Wash, Clinic, etc.
Describe Commission.
A sum, typically a set percentage of the value involved, paid to an agent in a commercial transaction.
Give another name for Income Statement other than Statement of Financial Performance.
Statement of Income and Expenditure
Differentiate between the main sources of revenue for Trading Businesses and Service Businesses.
Trading Businesses--Sales
Service Businesses--Service Fees
Differentiate between office salaries, and sales salaries.
Office salaries incur for the purpose of keeping the business organized, e.g. employees, whereas sales salaries are paid to sales people to improve their performance in selling goods.
What is the relationship between Balance Sheet and Income Statement?
The net profit calculated in the income statements is added to the Owner's Equity section of the balance sheet.