Ask Experts Questions for FREE Help !
Ask
    diana_a22's Avatar
    diana_a22 Posts: 1, Reputation: 1
    New Member
     
    #1

    Jun 13, 2008, 02:35 PM
    Recording revenue for financial institutions
    If your main line of business is makig investments and giving loans, how would you record revenues on your income statement? Would the whole amount received be considered revenue, or will one need to subtract the principal first? What would be the correct accounting entry for this?
    Thank you.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
     
    #2

    Jun 13, 2008, 04:30 PM
    On the loans, only the interest (or any fees or whatever) is your revenue. Getting a loan repaid isn't revenue. The loan is a note receivable, and when repaid, comes back off that receivable. You need to know for each payment, how much is interest and how much is revenue. And when the end of a year comes, you need to know how to accrue any interest amounts that have not been paid yet.

    Same concept with investments you're making. The investments are assets. Any actual earnings are what you record as revenue. But how you go about doing that will depend a lot on what types of investments you're making. (Investing in a stock is entirely different than investing in real estate, just for example.) And you have to know what revenues/losses you can record and when, and how you have to account for them.

    Don't take this wrong because I'm merely trying to be realistic, but I think you might be in a bit over your head and need more help than just trying to ask us a few questions. Not only do you have the basics to deal with, but you're in a specialized area and some things could get complicated. And... it sounds like you don't even know some of those basics.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Managing Financial and Non-financial Resources [ 5 Answers ]

Question One -Describe the things you should consider when putting together a budget for an Organization or department -How you would control the spending of the budget once it had been agreed? Question TWO: -How would you manage (control the use of) a non-financial resources? -What...

To produce a plan for financial and non-financial resources [ 1 Answers ]

As a manager produce a plan for financial and non-financial resources to meet mediun to long trem objectives of the company

Online Degree Institutions [ 8 Answers ]

Is Almeda University legitimate and if not, why haven't they been dealt with legally?

Financial statements to review/financial health of a company [ 0 Answers ]

Reviewing the company's balance sheet, which entries should be analysied To determine the financial health of a company?:confused: :confused: :confused:


View more questions Search