In this session we will be learning about what is the receipt and types of receipts? What is the revenue or income or sales and types of revenue, income and fields? What is the data or accounts receivable and bills receivable? What does the sales so let's begin now let's see what is receipts. receipts as the name itself suggest means amount received by the business it may be in the form of cash bank transfer or by cheque. So any amount which is received by the business is known as receipts.

Now, let's see what are the types of receipts Okay, so first one is capital receipts. So capital receipts are not recurring and they may be either in cash or bank okay. So capital receipts non recurring in the sense they are not frequently received okay. So what are the examples of capital receipts loan taken from bank or any other entity or receipts from the sale of assets. So, as you can see the business will take a loan from either bank or any entity as and when required it won't be on a day to day basis. Similarly, the sale of assets won't take place every day right.

So, receipts from the sale of asset would be non recurring. So, these are two examples of capital receipts. Now, revenue receipts recurring cash or bank receipts so revenue receipts are the receipts which are received in the on the recurring basis that is it may be received on the day to day basis. Let's see an example of revenue receipts, receipts from Sale of Goods receipts from providing services receipts from interest dividend commission. So, either on the sale of goods since your business is having a sale on day to day basis, you will be receiving the payments for the sale of goods frequently. So they are revenue receipts okay.

Similarly for providing services you will be receiving those receipts frequently. So, they are also part of your revenue receipts. Similarly, if you are invested some amount say in bank or some other company or there is some commission which you are receiving, those are also revenue receipts since they will be received on a quarterly basis or monthly basis. Depending on their terms, okay, so these are examples of revenue receipts. Now, let's move on to see what is revenue, revenue or income. These are the amounts owed by the business.

So any amount which is owned by the business is known as revenue. Let's see this and understand the difference between revenue and receipts. Now, say for example, this is your business. Okay? And this is your client, Mr. T. Okay, now you're selling goods to Mr. e. So you're all sold and delivered goods to Mr. e. Okay, now, Mr. He has not yet paid you okay.

Now, when you sell your goods to Mr a, you have earned the amount that is Mr. A has obligation to pay you for the goods say Mr a will pay you after one month okay. So, if you raise the toys on Mr. A and you sell the goods on to Mr. A, Mr a has obligation to pay you for the goods sold. So, as a business you help own that. So, at this point of time, it is your income irrespective of whether you have received the amount for those goods or not. Now, after one month since j is paying back he has made the payment for this goods. Now when he has made the payment as business you have received the amount okay?

The goods sold by you. So these are the receipts. So please don't get confused between receipts and revenue or income. Okay. Now let's take one more example. This is a business and this is Mr. B hazier client, you are providing some services to Mr. B.

Okay, Mr. B has given you an advance payment for those services. Okay. As of today, you have not provided any services to Mr. B, but he has given you an advance payment. Okay. Now as a business, you have not yet earned that amount. Okay.

You have only received the amount but you have not earned them. So this is a receipt. But it's not an income. Now after 15 15 days, okay, after 15 days, you provide him the services. And subsequently, you have raised the invoice for these services. So what has happened here is as a business you have earned the amount by providing services you have on the amount.

So at this point of time, you can record your income or revenue, the revenue and income need not be at the same time. Okay. Let's take one more example here. This is your business and this is Mr. C. Okay. So, you have sold the goods to Mr. C. And Mr. C has immediately paid in cash, okay, with demand for goods and cash. So here what has happened is we have The goods So, this is income.

Since we have on the income here, record our income, now he has immediately paid in cash. So we have received them. So this is received. So if you see here in case of cash sales usually income and receipt are at the same time. Now we'll take one more example this is our business and this is bank c ABC bank. Now we have taken a loan from ABC bank.

Now, if you see here, loan from ABC bank is our receipt. But as a business we have not owned anything. So there is no income or revenue. So there is no income or revenue in this example. Okay. So this is the difference between Revenue and receipt Now let's see what are the types of revenue types of revenue?

So, there are two types of revenue. One is direct revenue and one is indirect revenue. So let's see, first direct revenue, sales, direct income or direct revenue. Okay, these are alternative names for direct revenue, revenue owned by selling its products or providing services. Okay, so you need to identify what is the nature of business and revenue or income on by its nature of business that is either by selling its product or providing a service it's known as a directed GM or direct revenue. For example, if in case of a foreign Meet your dealer.

The furniture selling of a furniture is a product for him or a good for him, okay, it's not an asset. Since he is dealing in the furniture he will be purchasing the furniture and selling the furniture. So in that case, this revenue which is owned by selling the furniture is a direct in Gomorrah direct revenue. Okay, now, the revenue is classified direct income and direct revenue is again classified into two types. One is cash sales, and one is credit sales. Let's take an example and see the difference between the two.

Now, let's say this is your business. Okay. This is your glance okay. So we have sold goods to Mr. A okay. And Mr. A has immediately paid to us in cash, okay. So whenever we sell the goods and we get a payment immediately it is known as a cash sales.

So this is example of gases. Now, Mr. B, we have sold the goods and Mr. B has immediately given us a check. Okay. Now when you say castle, it doesn't mean a cache in literal terms okay. Even if a Mr B's giving us a check, we can immediately deposit it in the bank. So again this is also a gas sales.

Now, one more example, we have sold goods to Mr. C and Mr. C has not made us payment he will pay up to two months okay. So, whenever we sell goods or we provide any services, okay and we will be paid off tugboats, okay see after 15 days after one month after two months, then that seal is known as credit sale. Okay, and in this case, Mr. C is no less The our accounts receivable okay. And Mr. C is our current asset or short term asset, okay? So in short data's are the persons or entities who are obliged to pay us an amount for the sale of goods or for providing of services. Okay.

Now let's understand this concept of data. Now in the same example, okay, where in this disease or data say instead he will be making a payment after two months as a business, there is one option what we can do is okay, we can send him a bill. Okay. So the Mr. C okay. So we can send him a bill that is known as Bill of exchange. Okay.

And Mr. A will accept it accept and sign the bill and we'll send it back to us. So, what is there in the bill that is there in the bill that Mr. c will be paying us so and so amount after two months for the goods sold on so and so date okay that is the content of the bill. Now Mr. C will accept and sign it. It is known as bills receivable for business. And Mr. C it is known as bills payable since he has accepted the bill. for him.

It is bills table for our business it is bills receivable. Now once we received the bill okay what we can do is we can have an option okay we can discount it with the bank means what we can put this document in the bank okay and then we can get a loan against this bills receivable okay from the bank so this is advantage of bills receivable. Now bills receivable is also a short term asset. So in our books of accounts instead of Mr C as a data, okay if he signs the bill and sends it to us, we have bills receivable as a short term asset instead of data Okay. Now this was about your bills receivable bills payable. This is known as this concept is known as the salt exchange Okay.

Now, let's move on further sales return. So, when the goods sold are returned back due to some reason, it is known as sales return it will be reduced from total sales, it will also impact cash balance or your data's balance as per the terms with the customer okay. So, whenever your goods sold are returned back due to some reason either quality issue okay the customer may not require that type of good okay. So when those goods are returned, they are known as sales return. So the same example earlier example. This is a business we have sold goods to Mr. A on cash basis so it was a cash sale Now say Mr e returns back the goods okay.

So, now what will happen is Mr E has returned the goods okay. So, what will happen the goods will come back so our stock balance will increase, balance will increase, then our sales okay your sales will be reduced. So your sales return there is a sales return so sales will get reduced. Then since it was a scab sale, we have to give him back the cash or it may also be adjusted with your future sale. Okay. So that may affect either your cash if you're returning the cash your cash balance may go down or you may be how to record it as a Your short term liability okay to adjust it from your future seals okay.

So, your short term liability may grease get there may be one more possibility that he is your regular customer okay and his previous sales was a credit sale and he may say that this cash you can adjust it with that sale. So, in that case he was already a data for your previous sale okay. So that data balance may get reduced by adjusting these this cash with the previous sale. Similarly, for Mr. B also it's a cash sale. So all all these conditions will be similar for Mr. B also. Then all Mr. C, Mr. C say if he returns the good goods then what will happen?

Your stock balance will increase okay. Again there is a sales return. So, your sales will get reduced to that extent right then what has happened is he has B there was a credit sale okay we have sold the goods to Mr C on credit basis. So, there was no cash so, there is no no amount to be returned to him since we have not received anything, but you have recorded him as your data or short term asset in your book that will get reduced okay. So, this will be the impact of sales return in the books. Now this was all about your direct income.

Now, let us see the second part of revenue that is your indirect income, indirect income or indirect revenue, revenue earned by others means which are not directly related to the business. So when you own some income or revenue from some activities that are not related to your business or it's not your normal nature of business, then those active income are known as indirect revenue or indirect income. Let's see some examples. Now say there are some funds okay in your business and you have kept it in the bank as fixed deposit and you are earning interest on that fixed deposit okay on quarterly basis than that interest only. Zero in direct income or indirect revenue. Similarly, there may be some dividends okay on shares which are invested, so that dividend on is again, indirect revenue or indirect income subsidies Secondly indirect income or indirect revenue, okay is not generated on regular basis and it is not directly related to the nature of business.

Okay, this was about your revenue and receipts