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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