What is meant by income in accounting?

Financial performance is measured by profit or loss. Profit is measured as income less expenses. Income include both revenue and gains.

Revenue is income arising in the course of ordinary activities of the entity. It include sales revenue, fee income, royalties income, rental income and income from investments (interest and dividends).

Gain include gains from disposal of non current assets. Realized gains are often reported in the financial statements net of related expenses. They may arise in the normal course of business activities. Gains may also be unrealized. Unrealized gains occur when an asset is revalued upwards, but is not disposed off. For example, an unrealized gains occur when marketable securities owned by entity are revalued upwards.

6 thoughts on “What is meant by income in accounting?”

  1. Pingback: 11 Benefits Of Partnership Form Of Business. - Benefits Of Partnership Form Of Business

  2. Pingback: Net Profit Ratio - Meaning And Formula. - 22

  3. Pingback: 4 Characteristics Of Capital Income. % - ACCA F7

  4. Pingback: What Is Money Laundering? - ACCA ONLINE ACCOUNTING TEACHER

  5. Pingback: 9 differences between the company and the partnership. - ACCA P2

  6. Pingback: 5 disadvantages of consolidated financial statements. -

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: