What did they earn?

The charges earned is an accounting category that appears in the section of profit and loss income. Reflects the income obtained by providing services over the time period specified in the upper part of the statement. The type of business that will have this type of book income account is usually advice, a professional company or a company hired as an independent supplier.

Business can get revenue from many different sources. It can sell products, provide services or generate passive investment income. Each source of income is recorded in its own income account in the company's accounting system, so the relevant tax rules can be used for income when the company prepares its annual income tax return. Even more importantly, the separation of income to categories allows business owners to properly analyze factors that affect increasing and reducing income by the source of income.

Services -oriented -oriented businesses do not sell products. Intead, providing services for fees that are usually STAnoveny by contractual agreements. For example, accountants and legal companies provide professional services for fees. These services make up most of the company's income rather than revenue from the sale of products. These fees are monitored in the income account called fees received. The label effectively identifies the nature of the money collected in that account.

Companies generate financial statements to submit their financial situation for regulatory purposes, attract investors, borrow money and for many other reasons. The profit and loss statement, part of the standard group of financial statements, states the income and expenditure of the company by category for a certain period of time. One of the categories in income is the earned fees that would appear in the profit statement and the loss of any company that has revenue from this source.

There are several peculiarities regarding the fees for earned categories that affect businesses with mostly income basedm on fees. The company can manage its accounting on an accrual basis or cash. Accounting with an accrual means that income is reported when they are earned while cash accounting recognizes income when accepted. Many businesses that generate revenue via fees use accrual accounting, so they can record fees obtained in performing work for the client, not when paying the law. Decisions whether to record fees obtained by the incremental method or cash method may have significant tax consequences for services oriented to services.