Revenue Account Meaning In Accounting

A company s revenue which is reported on the first line of its income statement is often described as sales or service revenues.

Revenue account meaning in accounting. Contra comes from a latin contra meaning against or opposition contra revenue account usually means a deduction from the gross revenue which results in net revenue. Examples include revenue from sales revenue from rental incomes revenue from interest income etc. An account compiled at the end of a financial year showing that year s revenue and. Knowing the balance between gross revenue and net revenue and the cause of difference will surely benefit your business.

Revenues are increases in economic benefits during the accounting period in the form of increases in assets or decreases in liabilities that result in increases in equity other than those relating to contributions from equity participants. As shown in the expanded accounting equation revenues increase equity. Revenue accounts are those accounts that report income of the business and therefore have credit balances. A business can have both operating and nonoperating revenues.

Revenue accounts revenues or income refer to economic benefits received from business activities. Hence revenue is the amount earned from customers and clients before subtracting the company s expenses. Revenue is the amount a company receives from selling goods and or providing services to its customers and clients. This means that a credit in the revenue t account increases the account balance.

This account appears at the top line on your income statement and can be divided into several categories depending on from where your income comes. Meaning pronunciation translations and examples. The revenue account is a temporary equity account that increases total equity in the company. Often the term income is used instead of revenues.

Fees earned from providing services and the amounts of merchandise sold. This means that the revenue account has a credit balance and is closed at the end of each accounting cycle to a permanent or balance sheet account. Unlike other accounts revenue accounts are rarely debited because revenues or income are usually only generated. The revenue account is an equity account with a credit balance.

Types of revenue accounts. The part of a company s financial results showing details of income and expenses costs for a.