Sale of Old Newspaper yields income.
Its a non operating activity.
So, it falls under other income.
Why’s is it part of other income?
That’s because those cash inflows do not primarily contribute to sustaining the business.
In General, business entities subscribe to books and periodicals.
These are kept in Reception or Waiting Rooms or Team Meetings.
They provide an easy time pass for different stakeholders waiting to meet someone.
We often see newspapers, magazines or television, etc., in auditors, doctors, and lawyers’ offices.
Do you know the reason?
It help in engaging their clients and hoping that they will not feel bored.
Let’s see how to record the journal entry.
Old Newspaper Sold Journal Entry
We will learn this concept in the format of Questions and Answers.
What are the GL accounts in this transaction?
Income from Sale of Old Newspapers GL and Bank GL Account
What are the types of these accounts?
We can record the Journal entries as per Golden Rules of Accounting or Modern Rules of Accounting. The details of the rules are below.
Golden Rules of Accounting
Real Account Comprises all the assets. So, the bank GL falls into that category.
Old Newspaper Income is a nominal account and flows into the statement of profits. In other words, these are the accounts that relate to a specific period and will not be part of the balance sheet, which has running balances of the GLs. Refer to the Journal Entry for a detailed understanding of three categories of accounts as per Golden rules.
Modern Rules of Accounting
Accounting as per Modern rules is relatively easy to apply due to the self explanatory category of accounts. Lets look at those rules as well
What accounts need to be on the debit side and credit side of the Old Newspaper Sold Journal entry?
The result is not different for each approach. However, let’s understand the analysis before recording the this journal entry.
Golden Rules Analysis
Modern Rules Analysis
What is the Old Newspaper Sold Journal entry?
Old Newspaper Sold Journal entry is recorded by debiting the bank account and crediting the Income from the Sale of Old Newspaper GL. The income GL shall be descriptive enough to understand the GL. So, be very clear with the GL name and avoid using generic names such as other income.