Explain what is royalties.For Accounting purposes, how do we treat royalties paid & received?

March 3rd, 2011 Comments off
Share |

What is Royalties?

  • Relating normally to output of one kind or another or a sum relating to the use of an asset,e.g. how many per book sold by a publisher or how much tonnage on the output of ore from a mine

For accounting purpose, how to treat royalties paid and royalties received?

For royalties paid, it represent a charge or debit against Revenue Account or in the case of manufacturing concern, a charge against the Manufacturing Account

For royalties received, it represents income and as such will be credited to the Revenue Account

Comments are closed now.

Financial Accounting

 
 

Advertise Here | Brain Teasers/Puzzles | Greeting Cards | Inspirational Quotes | Jokes/Humor | Useful Links | Motivational Stories | Resource | Shopping | Share/Express Your Views | Testimonials | Universities/Colleges | Words of Wisdom from Religions | FREE POSTING OF ACCOUNTING & FINANCE JOBS VACANCY|