Any activity of an enterprise or an individual, with the exception of charity, is aimed at obtaining material compensation. What is revenue in economics? This is the amount of cash received for a certain period of time as a result of the manifestation of financial activity.
Characteristic
Revenues and expenses - the main result of the relationship between market entities. According to economic theory, there are two categories of income, depending on how they are considered. If we take as a basis the processes occurring at the micro level, the term will describe the receipt of material benefits due to the performance of labor or economic activities of individuals and legal entities. The total government revenue resulting from relations in the international market is considered at the macro level.
Income of individuals
Every person engaged in labor regularly receives wages. This is the simplest example of the acquisition of material benefits from the work. Citizens who are not employed in the labor sector most often do not have any means of livelihood, with the exception of social benefits, if they rely.
Thus, any adult and capable person finds for himself the most suitable conditions for receiving monetary compensation. Wages are most often the only source of funding for a family or an individual.
Types of income
After accruing wages to the employee, the nominal income of the individual is formed, that is, the amount that the employee is entitled to for the work performed. But the legitimate receipt of funds is mandatory tax deductible, not including contributions to the PF and other social funds. It turns out that a smaller amount will be issued to the employee. At the stage of payment of wages, with which all mandatory contributions to the budget were withheld, the net income of the individual is formed.
Market conditions are constantly changing. For example, a year ago, a person earned 20 thousand rubles. and could afford to spend much more money than now. But the amount of payments remained the same. Here another variety of income arises - real, which is analyzed as adjusted for changes in market prices.
Other personal incomes of citizens
Salary for many is the main, but far from the only way to receive money. There are other types of revenue generation, for example:
- social benefits for health and maternity;
- unemployment benefits;
- pension and scholarship funds;
- sale of real estate;
- receipt of dividends, interest on investments;
- enrichment of personal finances through livestock and crop production.
What is personal income of a natural person? It's all those material wealth which a person can receive after carrying out legitimate activities. Rational use of own resources will help to balance income and expenses, while receiving maximum benefit.
Confirmation of the availability of funds
In order to gain access to many public and commercial services, an individual must confirm their legal capacity and self-sufficiency. In such cases, a document is used - a certificate of personal income. The content provides for the availability of employee data, an indication of the period during which income was received, and the signature of the chief accountant and manager.
The income statement is a strictly confidential document confirming the availability of regular cash payments to the entity. Most often, a document is required when applying for loans and borrowings from banks, as well as to receive social assistance in government institutions.
What is the income of legal entities?
The ultimate goal of any enterprise is to make the profit necessary to cover costs and develop the business. In accounting, the income of an organization is understood as the receipt of funds, which leads to an increase in assets, not counting the material support of the founders. Components of an enterprise’s income are usually reduced to cash transferred by buyers for goods sold or services rendered.
Types of enterprise income
The main way to increase the property rights of an organization is to carry out economic activities prescribed in the accounting policy. Amounts received as a result of the provision of work, services or production and sales activities are attributed to sales revenue. The received funds cannot yet be called income, since they were not distributed by cost items.
Legal entities can receive material benefits not only from their core business. There are at least three more income groups:
- non-operating;
- operating rooms;
- extraordinary.
Operating cash inflows can also be considered sales revenue. The only difference is that the enterprise receives material benefits not from the sale of goods or services, but as a result of transfer of property rights for use. This also includes assets received after the sale of fixed assets and the amount of interest on securities. Operating income largely characterize the organization’s activities in the stock markets.
Income received by the company outside of sales
Positive amounts in the organization’s account, the receipt of which is not related to the sale of goods or services (works), arise, as a rule, as a result of contractual relations with counterparties.
What is revenue outside of sales? These are the amounts:
- fines and penalties for failure to fulfill obligations under the contract of sale;
- compensation for loss or material damage;
- Profits of past periods that were recognized in the current period;
- gratuitous receipts;
- positive exchange rate differences;
- surplus inventories after inventory;
- increase in the cost of fixed assets and intangible assets after their revaluation;
- obligations that have expired;
- other income of a similar nature.
Insurance payments received by the enterprise are classified as a separate category of extraordinary income, which, in fact, are also non-operating.
Revenue accounting
Amounts credited to the organization’s account are subject to control and recording in accounting documents. Any income must be confirmed, otherwise the funds are considered illegally received. There are those assets that are not included in the criteria for accounting for income and are reflected in other accounts. These include amounts:
- obligatory payments (VAT, export duties, etc.);
- commissions in favor of the committee;
- advances and deposits to pay for goods;
- incoming property in the form of a pledge;
- aimed at repayment by a debtor of debt.
The remaining types of income are allocated to accounts 90.1 and 91.1. The first of them collects information about the amount of sales revenue, the second is created to account for other income. The amount of revenue is reflected in the credit of the accounts of income accounting. To understand the principle of compiling transactions, consider typical examples:
- Dt 76 Kt 91.1 - other income recognized the amount from the rental of property rights.
- Dt 76 Kt 91.1 - the amount received in connection with the sale of assets was registered.
- Dt 62 Kt 90.1 - revenue from the sale of goods to customers is recognized.
- Dt 51 Kt 91.1 - the company paid the amount of forfeits.
- Dt 50 Kt 91.1 - the amount of the positive exchange rate difference is reflected.
- Dt 91.1 Kt 91.9 - the amount of income from other operations is revealed.
- Dt 91.9 Kt 99 - the amount of profit from non-operating activities amounted to n rubles.
- Dt 90.5 Ct 99 - reflects the amount of profit for products sold.
Dull revenue is primarily spent on paying bills to suppliers and covering other costs of production and sales. If after making all necessary payments a certain amount of money remains, it is recognized as the net income of the reporting month and is written off to the profit accounting accounts.
Tax accounting incoming assets
To generate reports containing information on the company's income for the period under review, the accountant sequentially performs several operations that are provided for by the accounting policy of the enterprise for tax purposes.
According to the Tax Code, there are incomes involved in calculating the tax base and those amounts that are not included in the calculation. In the General case, take into account the implementation and operational material income.
Enterprises operating under the simplified tax system, as well as most individual entrepreneurs, reflect information on the receipt and disposal of funds in a special document called "Book of income and expenses." Records are made in chronological order. Each of the operations must be confirmed by primary accounting registers.
Taking into account the essence of income, we can come to the final conclusion: the equalization of the concepts of "profit" and "income" is fundamentally wrong. Not always obtaining material values leads to the formation of a positive financial result. This is only an intermediate indicator of the implementation of an activity. As for individuals, in any case, income will be assessed as remuneration for the performance of certain duties.
