Royalty Accounts – Introduction, Terms Use, Summary

Royalty Accounts - Introduction

Royalty Accounts – Introduction, Terms Use, Summary :-  Here in this post we are going to discuss about the meaning, definition and introduction to the Royalty Accounts. We will also discuss the Terms Uses in Royalty.

Introduction/ Definition, Meaning of Royalty Accounts :-

Amount paid (or Payable) by the lease to The landlord(or owners) for transferring of special right to use any particular property is termed as royalty accounts.

Terms Use In Royalty :-

  • Year :- it means year of lease production.
  • Output :- production/yield in a year period.
  • Royalty :- Output x rate of royalty as par the agreement.
  • Minimum rent :- A minimum amount that must be paid to the landlord at any circumstances.
  • Short working :- Excess payment made due to short production in a year termed as a short working.
  • Short working recouped(s.w.r) :- Adjustment of short working from excess working as par the condition provision agreed between the two.
  • Short working Recoupment :- Transferred to profit and loss account the short working that can not be adjusted in future it is transferred to profit and loss account.
  • Amount paid to landlord :- A final adjusted amount that is paid to the landlord.

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