Total Revenue Accounting Definition

Revenue is the value of all sales of goods and services recognized by a company in a period.

Total revenue accounting definition. Total revenue equals the number of items of a good or service sold multiplied by the price of the good or service. Revenues have credit balances and the transactions with the greatest impact on these accounts are earnings related to cash and credit sales. Total revenue is the sum of the balances of all revenue accounts found in an entity s accounting records or ledger. Each extra unit of output sold marginal revenue adds exactly the same amount to total revenue as previous units.

Where to find total revenue. Total revenue is found on the income statement which is a finalized history of how your company performed over a certain period of time this can be a month quarter or even a year though we recommend looking at your financial statements monthly. A total revenue test approximates price elasticity of demand by measuring the change in total revenue from a change in the price of a product or service. 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.

Under conditions of imperfect competition for example monopolistic competition the firm faces a downward sloping demand curve and price has to be lowered in order to sell more units. For companies that provide services instead of products. 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. An accounting profit equals total revenues less total expenses.

Look to the income statement. It is also referred to as the total sales.