What Is Revenue In Accounting

For example if a new company sold 75 000 of goods in december but allows the customer to pay 30 days later the company s december sales are 75 000 even though no cash was received in december.

What is revenue in accounting. In other words revenue is income earned by the company from its business activities. Revenue does not necessarily mean cash received which is equally as common as a term. In accounting revenue is the income or increase in net assets that an entity has from its normal activities in the case of a business usually from the sale of goods and services to customers. Revenue may refer to income in general or it may refer to.

The best way to calculate a company s revenue during an accounting period year month etc is to sum up the amounts earned as opposed to the amounts of cash that were received. In accounting the terms sales and revenue can be and often are used interchangeably to mean the same thing. It reports sales in two categories products and services which then combine to form total net sales.