Direct vs Indirect income in accounting

Direct vs Indirect income in accounting

Direct vs Indirect income in accounting, friends, when a person starts a business, then that person wants that he should profit from business. And when he starts business, we come to know only through income that the person is getting profit in business or  loss. So friends today in this post I will tell you what is incomewhat are the types of incomewhat is the difference between direct and indirect income, and how do we calculate direct and indirect income in tally.

Also, Read:Difference between capital and money?

What is income in tally Accounting

When a person starts a business, then the person always does business with the aim of earning profit. When he receives money through business, we call it income, now this income is also of 2 types, direct income and indirect income. Friends, I will tell you what is direct income and indirect income.

What is direct income in tally Accounting

Direct income: – Such income which we get from the main source of business, we call it direct income, as we have production work, and we produce any item, then when we sell that item and The amount we get in exchange for that, we call it direct income in the language of accounting.

Also, Read: Meaning of sales in Tally Accounting

Example of direct income:-

1. School fees (if you have a school, the fees are direct income for you)

2. Goods production (the amount obtained by selling raw malls)

Indirect income: – Friends, such income which we get from sources other than business, we call them indirect income. Like if a person has a production business and has invested in some other place too, and if he has any income from that investment, then we will call it indirect income,

What is indirect income examples

1. interest Rec

2. commission Rec

3. rent Rec

4. discount rec.

Difference between direct income and indirect income

Friends, many times it becomes difficult to explain in tally which income is direct and which income is indirect, and when we enter it in tally, we put it in the wrong group, so that our profit and loss account is wrong. And we do not know the net profit or net loss in the business correctly. Friends, do not worry about this, I will tell you a very simple way by which you will know the difference between direct income and indirect income.

Example of direct income & indirect income in Tally

Indirect income: – Friends, such income which we get not through business but through any other means, we call it indirect income, like – interest received from the bank, if your shop or room is rented, then the rent received from it, If you have got any kind of commission from somewhere, if you have given a loan to someone and you have got interest from him, such income is an example of indirect income.

Direct income:– The income which we get from the main sources of business, we call it direct income. Like if you have a school, then the fees that come in the school are your direct income, apart from this, if any room of the school is given on rent and you get rent from it, then it will not be your direct income, it is indirect income.

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