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O-Level Revenue and other income

What the O-Level syllabus expects for Revenue and other income, and how to practise it.

What the syllabus expects

• Explain, drawing on the relevant accounting theories, how each of these is accounted for: service fee received in advance, sales revenue, income receivable, service fee revenue, income received in advance and other income
  Scope: Relevant theories: revenue recognition and accrual basis of accounting
• Work out sales revenue once sales returns are taken off
• Work out service fee revenue after allowing for amounts received in advance
• Work out other income once income received in advance and income receivable have been taken into account
  Scope: Excludes dividend income
• Write journal entries for transactions touching service fee revenue received in advance, sales revenue, income receivable, sales returns, other income, service fee revenue and income received in advance
• Draw up the ledger accounts for other income, service fee revenue, sales returns and sales revenue, leaving out adjustments for income received in advance, income receivable and service fee revenue received in advance
• Read the ledger accounts for other income, service fee revenue, sales returns and sales revenue once adjustments for income received in advance, income receivable and service fee revenue received in advance are made
  Scope: Excludes drawing up ledger accounts for income received in advance and income receivable
• Work out how three items - income received in advance, then income receivable, plus service fee revenue received in advance - shift current assets, current liabilities and the period's profit or loss
• Produce a trading business's Statement of Financial Performance extract that lays out sales revenue, sales returns and other income
• Produce a service business's Statement of Financial Performance extract that lays out service fee revenue and other income
• Produce a service business's Statement of Financial Position extract that shows service fee revenue received in advance
• Produce, for trading and service businesses alike, a Statement of Financial Position extract that shows income receivable and income received in advance

More O-Level Principles of Accounts topics

Roles of accounting and of accountants · Stakeholders and what they need in order to decide · Judging profitability · Judging liquidity · Judging efficiency of inventory and trade receivables management · Kinds of business · all of O-Level Principles of Accounts