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Revenue is any amount of the money which is received by a company in a particular time period. It includes the discounts and deductions for the returned merchandise. Revenue is the money which a company earns with help of its business activities. These business activities include the sale of the goods of services, any other capital or assets use, or it can be associated with the main organizational operations before the deduction of any costs or expenses. Generally, revenue is the represented in the income statement of profit and loss as the top item. From it, all the rest of charges, expenses and costs are subtracted to find out the net income. Revenue is the net income or the money which a company actually earns/receives over a specific time period. It is the top line or the gross income figure. Different companies have different ways of identifying revenues. It can be identified if any deal is signed. It can be identified if the money is received. There are some specific rules to recognize the revenue in different situations. Companies use accounting methods for this purpose such as the cash basis and accrual basis methods of accounting.
Revenue in governments is recognized if the money is generated from taxations, inter – governmental grants or transfers, mineral rights, fees, fines, and resources rights. Some of the companies receive revenues as royalties or interest. It is calculated when we multiply the price at we sell the goods or services by the number of the units or the amount sold. Many non – profit organizations identify the revenue as a gross receipt. The gross receipt includes the donations received from the public and corporations, government aid. Revenue is received as cash or cash equivalent. It is the estimation of periodic income. This is based on a specific standard accounting practice or the rules. These rules are set by government agencies.
Business revenue is the money income from the activities which are ordinary for any particular corporation, company or partnership. In business, revenues are reported as the sales, sales revenues or net sales. Sales tax is not included in the sales revenues. Many service businesses such as law firms receive their revenues from rendering services. Non – operating – revenue is the revenue which is obtained from peripheral operations (non – core operations). In manufacturing companies, the sale of a product will be regular revenue.
In government revenues, all the money (taxes, fees) is included. It is received from the sources which are outside the government entity. Many larger government institutions have a separate department or agency. This department collects the government revenues from the public and corporations. It may further include the printed reserve bank currency. Governments receive the revenue from the public through capital receipts, tax and non – tax revenues.
Any increase in the assets or decrease in the liabilities which is caused by the provision of services to the customers is known as revenue. It is listed at the very top of the income statement. Many deductions such as allowances, sales returns are taken from revenues. Sales taxes are collected on the behalf of government by the seller. So sales taxes are not listed revenue.
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