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What are the revenue receipts?
Revenue receipts are those through which, the funds are generated from business core activities and results in increase in total revenue. These are shown in the profit and loss account and not in the balance sheet. These funds are generated from sale of goods or by providing services to others. Revenue receipts are recurring in nature.
These have no effect on assets/liabilities of a company. These are the important sources of business to survive for longer periods. The benefits through revenue receipts are enjoyed in the current accounting period only.
Revenue receipts include the following −
- Sale of any inventory.
- Income generated from service rendered.
- Discounts from suppliers.
- Rent received.
- Interest earned (accruals adjusted).
- Commission earned.
- Recovered bad debts etc.
The essential conditions to satisfy with regards to revenue receipts are as follows −
- Not to create a liability.
- Should not decrease the asset.
The sources of revenue receipts are as follows −
Sum of total receipts (taxes + other duties).
Tax revenue is sub classified as the direct taxes (imposed on property and individuals and company’s income) and indirect taxes (which has effect on income and property of individuals and companies by their consumption expenditure)
These are the receipts other than tax receipts. Main sources of non-tax revenue are interest, dividends and profits, fees, penalties, license fee, fines, gifts, grants, escheats, forfeitures, special assessments.
- rent received
- dividend received
- interest earned
- commission received
- recovered Bad debts etc.
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