What is it?
Income, also known as revenue, is the generation of assets through business activities. Revenue is earned upon performance of the service or delivery of the goods. Revenue is unearned or deferred when the performance of the service has not taken place or when the goods have not been delivered.
Why is this important?
For the University, income would include:
- tuition and grant income,
- sale of goods or services to external parties,
- donation income, and
- investment earnings.
Income or revenues in the Carleton chart of accounts (COA) are recorded to account codes that start with 5. All unearned revenue is a liability on the balance sheet until the services or goods are delivered.
Technically, income cannot be generated by providing services or sales to internal departments or units of the University. There is no generation of new assets (e.g. cash) to the overall University and therefore internal sales/services must not be recorded as external income (e.g. using income/revenue account codes that start with 5) but as an internal recovery account (starting with 7).
Where do I find more information?
For further information contact Financial Services.