Interest Income
Interest income is money your business earns from interest-bearing accounts or investments — savings accounts, CDs, money market funds, or loans you've made to others.
Interest Income Definition
Interest income is revenue your business earns from interest on deposits, investments, or loans receivable. It's passive income — you earn it just by having money parked somewhere that pays interest.
Common Sources of Interest Income
How Interest Income Is Taxed
Interest income is generally taxed as ordinary income at your marginal tax rate. It's reported on your business tax return and flows through to your personal return if you're a pass-through entity (sole prop, partnership, S-corp).
How Interest Income Shows Up in QuickBooks
Bank interest is typically imported via bank feeds and should be categorized to an "Interest Earned" or "Interest Income" account (type: Other Income). Don't mix it with your regular revenue — it's not operating income.
FAQ
Q: Is interest income part of my business revenue?
A: It's income, but it's classified as "Other Income" on your P&L — separate from operating revenue. It doesn't affect your gross profit or operating margin calculations.
Related Terms
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Related Terms
Other comprehensive income (OCI) refers to revenues, expenses, gains, and losses that are excluded from net income on the income statement. These items — like unrealized gains on investments or foreign currency adjustments — appear in the equity section of the balance sheet instead. OCI captures fin
Cost allocation is the process of assigning shared expenses to different departments, products, projects, or cost centers based on a logical method. It distributes costs that can't be directly traced to a single activity — like rent, utilities, or administrative salaries — across the areas that bene
Net income is the total profit remaining after all expenses, taxes, and interest have been subtracted from revenue. It's the "bottom line" of the income statement and shows whether the business made money or lost money during the period. Net income flows to the Balance Sheet as retained earnings and
Posting is the process of transferring journal entries from the general journal to the individual accounts in the general ledger. It's the step that takes a recorded transaction and distributes it to the correct accounts — so your accounts receivable, cash, revenue, and other ledger accounts all ref
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