Service Revenue In Accounting Definition

An income statement is not concerned with cash flow it is concerned with revenues gains expenses and losses in both the operating and non operating activities of the business during a specific period of time.

Service revenue in accounting definition. Service revenues include work completed whether or not it was billed. Service revenue pertains to income earned from rendering services intangible products. Legal advisory accounting auditing et. Revenue earned from rendering services eg.

This revenue may be aggregated into a separate line item which appears near the top of the income statement. Cash basis accounting only recognizes the money when your customer pays you. When you draw up your income statement you include that money in your total service 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 from sale of goods. Service revenue appears at the top of an income statement and is separated but added to the product sales for a revenue total. Suppose that your landscaping business does a 1 000 job for a homeowner. Under the accrual basis of accounting the service revenues account reports the fees earned by a company during the time period indicated in the heading of the income statement.

Service revenue is the sales reported by a business that relate to services provided to its customers this revenue has usually already been billed but it may be recognized even if unbilled as long as the revenue has been earned. Cars stationery furniture etc 2. Fees earned from providing services and the amounts of merchandise sold. Under accrual accounting you have 1 000 in revenue as soon as you ve finished the job.

Definition classification and presentation journal entries and examples.