Revenue Is Reported When

The revenue recognition principle using accrual accounting.

Revenue is reported when. Revenues from a business s primary activities are reported as sales sales revenue or net sales. This includes product returns and discounts for early payment of invoices. A company s revenue which is reported on the first line of its income statement is often described as sales or service revenues. Revenue recognition is a generally accepted accounting principle gaap that stipulates how and when revenue is to be recognized.

For start up companies that have yet to turn a profit revenue can sometimes serve as a gauge of potential profitability in the future. A survey produced quarterly by the census bureau that provides estimates of total operating revenue and percentage of revenue by customer class for communication key. Under the accrual basis of accounting revenues are reported in the accounting period when the services or goods have been completed. Revenue is the amount a company receives from selling goods and or providing services to its customers and clients.

Most businesses also have revenue that is incidental to the business s primary activities such as interest earned on deposits in a demand account. This is answer to question 3 on the accounting basics quiz.