Income Statement Accounts

The Chart of Accounts is normally arranged or grouped by the Major Types of Accounts. The Balance Sheet
Accounts (Assets, Liabilities, & Equity) are presented first, followed by the Income Statement Accounts
(Revenues & Expenses).
Here we're going to discuss the Income Statement Portion of the Chart Of Accounts (Revenues and
Expenses) and how it's organized,

The Income Statement portion of the chart of accounts normally begins by listing Revenue Accounts followed
by the Expense Accounts. The revenues are grouped or classified based on whether they are related to the
normal operations of the business (primary business activities) called Operating Revenue or result from
incidental (secondary business activities) called Non-operating Revenue.

Likewise, the expenses are grouped or classified based on whether they are related to the normal operations
of the business (primary business activities) called Cost of Goods Sold and Operating Expenses or result from
incidental (secondary business activities) called Non-operating Expenses.

While most revenue and expense accounts that need to be set up are common to all businesses, some
depend on the type of business. Cost Of Sales is needed for those businesses that produce and sell goods or
"inventoriable" services as well as those that just buy and resell the goods.

 Revenue
Formal Definition:The gross increase in owner's equity resulting from the operations and other
activities of the business.

Informal Definition:Amounts a business earns by selling services and products and investing. Amounts
billed to customers for services and/or products.

o Operating Revenue
Revenues resulting from the normal operations of a business such as the revenues resulting
from the sale of products and services to your customers.
 Sales
 Products
 Services
 Sales Discounts (Contra-Revenue Account)
 Sales Returns and Allowances (Contra-Revenue Account)
o Non-Operating Revenue and Gains
Non-operating revenue accounts include all types of income that you receive that are not part
of your main line of business. In other words, revenues or gains resulting from something
other than from normal business operations.
 Interest Income
 Dividends
 Commissions
 Rental Income
 Gain On Sale Of Assets
 Gains -Other Unusual

 Expenses
Formal Definition:Decrease in owner's equity resulting from the cost of goods, fixed assets, and
services and supplies consumed in the operations of a business.

Informal Definition:The costs of doing business. The stuff we used and had to pay for or charge to run
our business.

o Cost of Sales or Cost of Goods Sold

Cost of Goods Sold - the cost of the products purchased or manufactured and sold by a
business.
 Cost Of Goods Purchased and Sold
 Purchases
A temporary account used in the periodic inventory system to record the
purchases of merchandise for resale. This account reports the gross amount of
purchases of merchandise. Net purchases is the amount of purchases minus
purchase returns, purchase allowances, and purchase discounts. While the
Purchases Accounts are normally classified as temporary expense accounts, they
are actually "hybrid" accounts. The purchase accounts are used along with
freight and the beginning and ending inventory to determine the Cost Of Goods
Sold.
 Purchase Discounts (Contra Account)
 Purchase Returns and Allowances (Contra Account)
 Freight
 Cost Of Goods Manufactured and Sold
o Operating Expenses
Operating Expenses - the expenses related to normal daily operations such as wages, rent,
advertising, insurance, etc. These expenses are related to the normal operations of the
business (primary activities) and are incurred in order to earn normal operating revenues. In
other words, amounts spent on products and services related to normal business operations.

While not absolutely necessary, the Operating Expenses are often grouped into two main
functional areas of operation:

 Selling Expenses
Selling Expenses are expenses incurred and related to making sales. Examples are sales
salaries & wages, fringe benefits, advertising, travel, entertainment, catalogues, rent,
utilities, telephone, commissions, warehousing, shipping, depreciation, office supplies,
postage, etc.
 General and Administrative Expenses (G&A)
G & A Expenses are related to the general operations or overall administration of the
business. Examples are administrative salaries & wages (officers, office, accounting,
management, and human resources), fringe benefits, supplies, rent, utilities, telephone,
travel, entertainment, depreciation, office supplies, postage, legal & accounting fees,
etc.

The following listing of types of expenses, where needed, can be used and included in both
groups. There are no rigid rules as to the order that the operating expenses are listed within a
category.

 Salaries and Wages

 Salaries - Other
 Salaries - Officers
  Wages - Regular
 Wages - Overtime
 Incentive Pay
 Commissions
 Bonuses
 Severance Pay
 Required Payroll Related Expenses
 Employer FICA
 Employer Medicare
 Workers’ Compensation Insurance
 Federal Unemployment
 State Unemployment
 Fringe Benefits
 Vacation Pay
 Holiday Pay
 Sick Pay
 Other Paid Leave
 Parking
 Meals
 Employer Provided Health Insurance
 Employer Provided Life Insurance
 Employer Provided 401 K Contributions
 Employer Provided IRA Contributions
 Employer Provided Pensions & Retirement
 Other Employer Provided Benefits
 Employee Recruitment
 Travel
 Lodging
 Meals
 Other
 Entertainment
 Advertising
 Employment Agency Fees
 Temporary Help
 Cash Over / Short
 Supplies Expense
 Operating Supplies
 Maintenance Supplies
 Cleaning Supplies
 Office Supplies
 Computer Supplies
 Other Supplies
 Rent Expense
 Land
 Buildings
 Equipment
 Vehicles
 Other
 Leasing Expense
 Land
 Buildings
 Equipment
  Vehicles
 Other
 Repairs & Maintenance
 Buildings
 Grounds
 Equipment
 Office
 Store
 Manufacturing
 Vehicles
 Other
 Vehicle Operating Expenses
 Delivery Expenses
 Insurance Expense
 Building & Contents
 Vehicles
 Business Interruption
 Casualty
 Product Liability
 Professional Liability
 Other
 Fees , Licenses, and Permits
 Security
 Janitorial Services
 Uniforms
 Bank Charges and Fees
 Credit Card Fees
 Postage
 Cleaning
 Memberships
 Subscriptions
 Training and Education
 Tuition and Fees
 Transportation
 Lodging
 Meals
 Other
 Travel
 Travel - Overnight
 Lodging - Overnight
 Transportation - Overnight
 Meals - Overnight
 Other - Overnight
 Travel - Local
 Lodging - Local
 Transportation - Local
 Meals - Local
 Other - Local
 Entertainment
 Meals
 Gifts
 Events
  Other
 Catalogues and Publications
 Advertising
 TV Ads
 Radio Ads
 Newspaper & Magazine Ads
 Internet Ads
 Website
 Promotional Events
 Other
 Royalties
 Franchise Fees
 Professional Fees
 Legal
 Auditing
 Accounting
 Tax Preparation
 Consulting
 Other
 Utilities
 Electricity
 Gas
 Water
 Garbage Collection
 Other
 Telephone
 Internet Access & Services
 Credit and Collections
 Bad Debts Expense
 Collection Expense
 Credit Reports & Background Checks
 Depreciation Expense
 Depreciation - Vehicles
 Depreciation - Buildings
 Depreciation - Building Improvements
 Depreciation - Machinery and Equipment
 Depreciation - Office Equipment
 Depreciation - Computer Equipment
 Depreciation - Vehicles
 Depreciation - Furniture & Fixtures
 Depreciation - Computer Software
 Depreciation - Other Property, Plant, or Equipment
 Amortization
 Amortization - Leasehold Improvements
 Amortization - Goodwill
 Amortization - Organization Costs
 Amortization - Other
 Property Taxes
 Personal Property
 Real Property
 Other
o Non-Operating Expenses and Losses
Amounts spent on products and services not related to normal business operations (secondary
activities). In other words, expenses and losses resulting from something other than from
normal business operations.
 Donations
 Penalties & Fines
 Loss On Sale Of Assets
 Losses - Other Unusual
 Interest
 Taxes
 Franchise & Excise Taxes
 Federal Income Taxes
 Other Taxes
 Figure 1: Distribution of Goods and Services in the Economy
IV.D.

All Goods and Services

Non-specific Goods & Services

Tourism Specific Goods & Services

• Clothing and Garments

• Processed Food

• Tobacco Products

• Alcohol

• Travel Related Consumer

Goods

• Footwear

• Toiletries

• Gems & Jewellery

• Medicine & Health Related

Items

• Printing and Publishing

 Tourism characteristic industries
Industries Items of Expenditure
Hotels
1. Accomodation Services Private guest house
Tourist guest house
Govt. guest house
Dharamshala
Rented houses
Relatives
Others
Food and Refreshment joints at Railway
2. Food and Beverage Serving station, bus stand, train
Services Hotels
Private guest houses
Tourist guest houses
Govt. guest houses
Dharamshala
Restaurants
Cafeteria
Snack bars
Lunch counters
Refreshments stands
Canteens
Milk bars
Bars & other drinking places
Mela, Fair, Picnic
Others

3. Passenger Transport Services

Railway
• Railway

Passenger transport by bus services

• Road (Buses and other mechanised
Passenger transport by other motor
road transport
vehicles
Own Transport - Two wheeler
Own Transport - Auto
rickshaw/car/jeep/bus/tractor
Others
Items of Expenditure
Passenger or freight transport via
hackney carriage, bollock carts,
ekkas, etc.
Transport by animals
Transport by man including rickshaw
and cart pullers, pushcart operators,
 palki bearers, doli carriages, etc.
Own Transport - Animal driven
transport
Own Transport – Rickshaw
Ship/boat
Air
Other support services
Hired taxi/car/jeep/tractor
Travel Agents
Tour Operators
Tourist Guides
Cinema, Night clubs, Theatres
Conferences and Conventions
Other Amusements
Items of Expenditure
Suitcase,trunk,hand bag, other travel
goods
Spectacles, pen, lock, umbrella
Radio, walkman,torch,batteries etc.
Camera,cassettes,films etc.
Others
Photography, Video Cassette
Sports items and Toys
Leather footwear
Rubber footwear
Others
Toilet soap, washing soap, washing
powder,hair oil etc.
Tooth brush, tooth paste, tooth
powder
Body talcum, powder, face cream
Shaving blades, shaving stick, razor,
shaving cream
Other toiletries
Gems & Jewellery
Medicines and Health Related items
Book,magazines, Newspapers,
Library and other stationery
Impairment