Definition Of Revenue In Accounting Terms

The inflow of assets that results from sales of goods and services and earnings from dividends interest and rent.

Definition of revenue in accounting terms. In other words revenue is income earned by the company from its business activities. Revenue is money brought into a company by its business activities. A company s revenue which is reported on the first line of its income statement is often described as sales or service revenues. Revenue can also include the discounts and deductions for any returned merchandise during the same period.

Revenue is also known as sales as in the price to sales ratio an alternative to the price to earnings ratio that uses revenue. Under the accrual basis of accounting revenues are recorded at the time of delivering the service or the merchandise even if cash is not received at the time of delivery. Revenue is the value of all sales of goods and services recognized by a company in a period. It is typically calculated as follows.

Often the term income is used instead of revenues. It is a quantification of the gross activity generated by a business. Fees earned from providing services and the amounts of merchandise sold. Home accounting dictionary what is revenue.

An expense that has occurred but is not recognized in the accounts. Definition of revenue revenue is the amount a company receives from selling goods and or providing services to its customers and clients. It is calculated by multiplying the price for the goods or services by the number of units sold. Revenue is essentially the amount of money a business receives for a specified period.

Number of units sold x unit price revenue. Expenses are recognized when incurred rather than when paid. Method of accounting that recognizes revenue when earned rather than when collected. Revenue also referred to as sales or income forms the beginning of a company s income statement and is often considered the top line of a business.