Difference between Rent & Royalty Account, Types of royalties

Class - BBA l st yr.

Subject - Financial Account

Subject type - Minor ll

By AP N Jaiswal

Rent

• What it's for: Using physical assets like land, buildings.
• How it's calculated: Usually a fixed amount per time period.
• Nature: Stable, predictable payments.
• Example: Paying ₹500 monthly for an office space

Royalty

• What it's for: Using special rights or resources
• How it's calculated: Based on output, units sold,
• Nature: Variable, fluctuating
  
• Key Features: Often includes minimum rent
• Example: A musician earning 10% of book sales

Types of royalties

* Copyright Royalties

* Patent Royalties

* Trademark Royalties

* Natural Resource Royalties

* Software Royalties