Question

My bakery just sold an extra parking lot we do not use next to our facility. Is the revenue from that part of SALES or OTHER INCOME? Explain your answer.

Answer 1

Sales revenue in accounting terms means revenue earned throgh doing core business related activities which are primary purpose of the firm while other income of the firm means that income earned through other than core business of the firm.

in this case ,Bakery sold an extra parking lot they do not use next to their family and it is a non core business activities as it is not primarily related with doing business with bakery related stuffs.

Revenue earned through doing bakery related is core business revenue and to be recognised as sales while revenue earned through parking is a non core business revenue as to be recognised as other income.

So the revenue from selling of parking will be Other income for bakery firm.