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Solved Questions: Royalty Accounts Video Lecture - B Com

FAQs on Solved Questions: Royalty Accounts Video Lecture - B Com

1. What are royalty accounts in B Com?

Ans. Royalty accounts in B Com refer to the accounting records maintained by businesses to track royalties paid or received for the use of intellectual property, such as trademarks, patents, or copyrights.

2. How are royalty payments accounted for in B Com?

Ans. Royalty payments are typically recorded as expenses in the income statement of a business. The amount paid is deducted from the revenue generated by using the intellectual property to calculate the net income.

3. What is the importance of royalty accounts in B Com?

Ans. Royalty accounts play a crucial role in accurately tracking and managing royalty payments, ensuring compliance with legal agreements, and assessing the financial impact of using intellectual property on the business's profitability.

4. How are royalty receipts accounted for in B Com?

Ans. Royalty receipts are usually recorded as revenue in the income statement of a business. The amount received is added to the total revenue to determine the gross income earned from licensing the intellectual property.

5. How are royalty expenses and income reported in the financial statements of a business in B Com?

Ans. Royalty expenses are reported as a separate line item under operating expenses in the income statement, while royalty income is included in the total revenue section. Both are essential components for evaluating the financial performance of a business.

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Sep 20, 2025 Last updated

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