Journal Entry: Sundry Incomes and Other Incomes

Arjun EP

Published on: September 29, 2020

How to make journal entry for other incomes

The main income of the trading company is sales revenue; and service providing company is service revenue.

Other than sales and service revenue income is known as other income.

A firm can earn different other incomes from business and investment.

Some regular other incomes are discount received, interest received, commission received, dividend received, rent received etc.

Keep in mind

Cash account	Dr	Income received in cash	Increase in assets
Bank account	Dr	Income received by cheque	Increase in assets
Income receivable account	Dr	Income earned but not received	Increase in assets
Accrued income account	Dr	Income earned but not received	Increase in assets
To Income account (by name)		Name of income head	Increase in income
(Being- income received or receivable)

Journal Entry

In the book of ……………

Date	Particulars		LF	Amount Dr	Amount Cr
	Cash account	Dr		xxxx
	Bank account	Dr		xxxx
	Income receivable account	Dr		xxxx
	Accrued income account	Dr		xxxx
	To Income account (by name)				xxxx
	(Being- income received, earned or receivable)

Keep in Mind (KIM)

Incomes are credited in journal entry. Some regular incomes are:

Discount received, interest received, commission received, dividend received, rent received.

Income earned but not received till account close in known accrued

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country

PROBLEM: 14

BRB Trading House has following transactions:

3 September, Discount received in cash Rs 3,200.

6 September, Interest received on investment Rs 10,000 by cheque.

9 September, Commission receivable Rs 2,000.

12 September, Dividend received on investment in shares Rs 3,000 through bank account.

15 September, Rent received on sub-let Rs 12,000.

18 September, Accrued commission Rs 5,000.

Required: Journal entries

SOLUTION

Journal Entry for American Style

Date		Debit $	Credit $
Sep, 3	Cash account	3,200
	Discount received		3,200
	To record discount received from creditor

Journal Entry for European Style

Date			€	€
Sep, 3	Cash account	Dr	3,200
	Discount received			3,200
	To record discount received from creditor

Journal Entries

In the book of BRB Trading House

Date	Particulars		LF	Amount Dr	Amount Cr
3	Cash account	Dr		3,200
September	To Discount received account				3,200
	(Being- discount received in cash)
6	Bank account	Dr		15,000
September	To Interest received account				15,000
	(Being- interest received on investment)
9	Commission receivable account	Dr		2,000
September	To Commission received account
	(Being- commission receivable)				2,000
12	Bank account	Dr		3,000
September	To Dividend received account				3,000
	(Being- dividend received on investment in shares)
15	Cash account	Dr		12,000
September	To Rent received account				12,000
	(Being- rent received on sub-let)
18	Accrued commission account	Dr		5,000
September	To Commission received account				5,000
	(Being- commission earned but not received)