Operating Revenue In Accounting Definition

The revenue a company receives in the course of its normal operations.

Operating revenue in accounting definition. Under the accrual basis of accounting revenue is usually recognized when goods are shipped or services delivered to the customer. A company s revenue which is reported on the first line of its income statement is often described as sales or service revenues. Total operating revenue is one. Operating revenue is the sales associated with the normal daily operations of a business.

Revenue is the dollar amount received by a company for the goods and services it sells. Under the cash basis of accounting revenue is usually recognized when cash is received from the customer following its receipt of goods or services. Revenue is sometimes referred to as sales but the latter may occur before the revenue is booked as when a sales rep receives a purchase order but the product has yet to be delivered to the customer. For example a retailer produces its operating revenue through merchandise sales.

Examples include sales and commissions as well as other things that may vary according to the time of business. Operating income also referred to as earnings before interest taxes ebit is the bottom line profit recorded on the income statement and it is generated by the operational activity of an organization. For example the meals sold by a restaurant would generate operating revenue while the sale of its delivery van would instead generate a gain or loss. Operating revenue is the revenue that a company generates from its primary business activities.

There are many ways to earn revenue but the operating revenue is earned from the core business activities which the organization undertake in their main working. Revenue is also known as sales as in the price to sales ratio an alternative to the price to earnings ratio that uses revenue. Operating revenue means revenue earned by an individual firm company organization from the core activities which they undertake on a regular basis. In other words revenue is income earned by the company from its business activities.

Hence revenue is the amount. Importantly operating revenue on a balance sheet reflects only ordinary revenue rather than unexpected one time income. Revenue is money brought into a company by its business activities.