These are accounts that are used to track the various sources of your company’s income. There may be only a few sources of income for your business or you may wish to track your income in more detail. The information which you collect in your income accounts will be used to prepare your Profit and Loss Statements periodically. Recall that a Profit and Loss Statement is also referred to as an Income and Expense Statement.
On the Chart of Accounts that is used in this book, income is separated into several categories. You can choose the income account categories which best suit your type of business. If your business is a service business, you may wish to set up accounts for labor income and for materials income. Or you may wish to set up income accounts in more detail, for example: sales income, markup income, income from separate prop¬erties, or income from separate sources in your business, etc. Nonsales income, such as bank account interest income or income on the sale of business equipment, should be placed in separate individual income accounts. You may also wish to set up separate income accounts for income from different ongoing projects or income from separate portions of your business.
Following is a list of various general income accounts. Decide how much detail you will want in your financial records regarding income and then choose the appropriate accounts. You may wish to name and create different accounts than are listed here. After you have chosen your income accounts, assign a number to each account.
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