Royalty income refers to the income obtained by enterprises from providing patent rights, non-patented technologies, trademark rights, copyrights, etc. For royalties income, accountants generally set up accounts for bank deposits and other business income. What are the specific accounting treatments?

Accounting entries for royalties income

1. Royalty income

Royalty income shall be used in accordance with the franchise stipulated in the contract. The realization of income is recognized on the date when royalties are payable

Debit: bank deposits

Credit: other business income

2. Royalty expenses< /p>

Royalty fees need to be included in current accounts first

Debit: prepaid accounts

Credit: cash on hand/bank deposits, etc.

Other business income refers to the income obtained from other daily activities other than the main business of various enterprises. Generally speaking, the income from other business activities is not large, the frequency of occurrence is not high, and they account for a small proportion of income.

What is a prepaid account?

Prepayment refers to a creditor's right arising from an agreement between the buyer and the seller, whereby the buyer pays a portion of the payment in advance to the supplier. Prepaid accounts specifically include prepaid goods and prepaid purchase deposits. For example, the prepayments of construction enterprises mainly include prepayments for projects, prepayments for materials, etc. Prepayments are payments made in advance to supplier customers and are also part of the company's claims.

What is a bank deposit?

Bank deposits are money stored in banks and are a component of monetary funds. According to the provisions of my country's cash management system, every enterprise must open a deposit account at the People's Bank of China or a professional bank to handle deposits, withdrawals and transfer settlements. In addition to the monetary funds of the enterprise, it can keep a small amount of cash within the prescribed limit. , must be deposited in the bank. The company's bank deposits mainly include settlement account deposits, letter of credit deposits, foreign deposits, etc. The cashier is responsible for handling the receipt and disbursement of bank deposits. For each bank deposit income and expenditure business, accounting vouchers must be prepared based on the original vouchers that have been verified to be correct.