8. Write a short on revenue a/c and met revenue a/c.

1. Revenue account:
Public utility companies prefer revenue account just like profit loss a/c. The aim of
preparing revenue a/c is to know the profit or loss for the particular period. All expenses such
as generation, distribution, public lamps, rent rates and taxes, management expenses, law
charges depreciation are shown on the debit side of revenue a/c. All the incomes such as sales
of energy for light, transfer fees, sale of ashes, etc are shown on the credit side of revenue a/c.
The balance of profit or loss will be transferred to net revenue account.
2. Net revenue account:
It is similar to profit loss appropriation account. It starts with balance of the net revenue
account brought forward from the last year. All appropriations such as interest paid,
contingency reserve, dividend control reserve are shown on the debit side of net revenue a/c.
The balance of this account is transferred to general balance sheet.
Important points to be noted while solving problems:
Revenue a/c is a type of nominal a/c debit all expenses incurred inconnection with
manufacturing and distribution and maintenance of supply and credit all incomes by sale of
electricity.
Net revenue a/c is a type of profit loss appropriation account. Profit arrived from revenue a/c
and previous tear balances should be distributed to dividend and interest of the capital.
Under receipts and payments of capital a/c- Enter all capital receipts such as shares,
debentures and loans in the credit side of capital a/c. Similarly enter all fixed item expenses
such as land, machinery, buildings, mains in the debit side of capital a/c
Under general balance sheet enter all capital receipts, (total of capital a/c) and current
liabilities and depreciation fund, net revenue balances in the debit side of balance sheet.
Similarly enter all capital expenses (total of capital a/c) and current assets in the credit side of
balance sheet.