What is it?
Revenue, also referred to as income, is the generation of assets through business activities.
Why is it important?
For the University, this would include tuition and grant revenue, sale of goods or services to external parties, donations received and investment earnings. Revenues in the Carleton chart of accounts (COA) are found in account codes that start with 5.
Revenue, technically, cannot be generated by providing services or sales to internal departments or units of the University. There is no generation of new assets (i.e. cash) to the overall University and therefore internal sales/services must not be recorded as external revenue (i.e. using revenue account codes that start with 5) but as an internal recovery. There are several recovery accounts, depending on the nature, which are housed within the expense section of the general ledger. The internal recovery will still provide a source of ‘funding’ to the unit providing the sale/service, but the University’s overall revenue/income will not be overstated.
Where do I find more information?
For a list of commonly used revenue, internal recovery and expense account codes: commonly used account codes.