Income

The money earned by your business as a result of sales or services. This is usually derived from the primary activity of your firm. You may wish to establish multiple income accounts to more clearly show where your firm's sales are coming from. In CAPITAL Office we would simply print a stock group sales report.

In a general ledger we might set up a series of major account groups. For example, if you were a retailer of whitegoods and electronic equipment you might establish income accounts for refrigerators, computers, stereo equipment, your music section, miscellaneous sales, etc. You might also earn income from several activities your firm "does on the side". For example, you might earn a commission for selling goods on behalf of another firm or collect rent for property your firm possesses. If these aren't the primary activities of your firm, or tend to happen infrequently, then usually they are separated from your revenue or income accounts and placed under an "other income" category. For example:

• Sales - whitegoods

• Sales - stereo equipment

• Sales - computers

• Sales - music

• Sales - others

• Sales - other income

You could establish as many or as few income account groupings as you felt were useful. In the past (prior to computers coming on the scene) too many categories tended to make the job of classifying sales excessively time consuming. Nowadays with a program such as CAPITAL Office, this type of classifying of sales can be performed automatically.