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← Chapter 6 · Revenue and Other Income
In these notes · Presentation in Financial Statements
6.1Types of Income6.2Accounting for Sales Revenue6.3Accounting for Service Fee Revenue6.4Accounting for Other Income6.5Income Received in Advance6.6Income Receivable6.7Presentation in Financial Statements6.8Interpreting an Income AccountThe Two Income Adjustments — At a GlanceChapter Summary
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6.7

Presentation in Financial Statements

Key Concepts

In the Statement of Financial Performance

Trading business format (extract):

Statement of Financial Performance for the year ended [day month year] (extract)
$$
Sales revenueX
Less: Sales returnsX
Net sales revenueX
Less: Cost of salesX
Gross profitX
Add: Other income
Rental incomeX
Commission incomeXX

Service business format (extract):

Statement of Financial Performance for the year ended [day month year] (extract)
$$
Service fee revenueX
Add: Other income
Rental incomeX
Commission incomeXX

Key rules:

  • Service fee revenue is not listed under "Other income." It is always the primary revenue line for a service business.
  • Each type of other income is listed as a separate line item — not combined into a single "Other income $X" line.
  • Sales returns are shown as a deduction from sales revenue, not as an expense.

In the Statement of Financial Position

After year-end adjustments, income receivable and income received in advance appear in the Statement of Financial Position:

Statement of Financial Position as at [day month year] (extract)
$
Current assets
Income receivableX
Current liabilities
Income received in advanceX
Cher
How to Remember
WhatWhichWhere
Sales revenue / Service fee revenueStatement of Financial PerformanceTop line
Other income (Rental, Commission, etc.)Statement of Financial PerformanceAfter gross profit — each type on its own line
Income receivableStatement of Financial PositionCurrent asset
Income received in advanceStatement of Financial PositionCurrent liability
Common Mistakes
1

Placing service fee revenue under "Other income" — Service fee revenue always appears before "Add: Other income" as a separate top-line item.

2

Combining all other income into one line — Each type of other income (Rental income, Commission income, etc.) must be shown as a separate line item.

3

Forgetting income received in advance and income receivable in the Statement of Financial Position (SoFP) — After year-end adjustments, these balances must appear in the SoFP: income received in advance as a current liability, income receivable as a current asset.

Check Your Understanding
In the Statement of Financial Position, "Income received in advance" appears under — Current assets or Current liabilities?
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Current liabilities.
True or False — In a trading business's Statement of Financial Performance, "Other income" appears before "Cost of sales."
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False. Other income appears after gross profit (i.e., after cost of sales has been deducted from net sales revenue).
Classify each: (a) Commission income receivable; (b) Service fee revenue received in advance.
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(a) Current asset; (b) Current liability.