By-product Sales (Secondary Revenue Stream)
Recording revenue from the sale of processed by-products, such as crushed glass (cullet) or yard-waste compost.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable / Cash | Asset (+) | 2,200.00 | - |
| Revenue - By-product Sales | Revenue (+) | - | 2,200.00 |
💡 Accountant's Note
MRFs and landfills often create secondary products. Yard waste is turned into compost; glass is crushed into 'cullet' for road base or bottle manufacturing. These are recorded as separate revenue streams from the core 'Service' or 'Commodity' revenue because they often have different tax implications and margin profiles.
Practitioner & Systems Framework
💻 ERP Architecture
These are treated as 'Finished Goods' sales. If the company uses the by-product internally (e.g., using compost for landfill cover), no revenue is recognized; instead, the cost is transferred from the MRF to the Landfill site.
⚠️ Audit Flags
Verification of delivery. Unlike service revenue (which is intangible), by-product revenue requires proof of physical shipment/pickup (Bill of Lading).
📄 Required Documentation
Bill of Lading, weigh-out ticket from the scale, and customer purchase order.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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