Revenue Definition represents the amount receivable or realized from sale of goods. The gross income or proceeds is recognized only when it is legally due. What is Revenue definition? definition of revenue is defined as the cash inflow of assets which results in an increase in the owner’s equity. It includes all income like sales receipts, interest, commission, brokerage etc. However, receipts of capital nature like additional capital, sale of assets etc., are not a part of revenue. Revenue is the gross inflow of cash, receivables or other consideration arising in the course of an enterprise from the sale of goods, service and from holding of assets. Operating Revenue Definition – it means revenue from business operation in a accounting period. A businessman collects the money for selling a product or rendering service is called as. Revenue is considered as earned on the date when it is realized. All the revenue incomes for the current year are shown n the credit side of profit and loss account. Generally definition of revenue terms are in the name of like: income, takings, receipts, proceeds, earnings, returns, rewards, yield, interest, gain. In general, a Sales Revenue Definition is turnover an entity accrues or receives from its business operations. Turnover is normally from the sale of goods. Revenues are from royalties, fees or other receipts in the form of monetary nature also. In case of an entities are as non-profit organizations, revenue is called as gross receipts. It includes donations receipts from business firm, mission, and membership fees, receipts from share or stock investments etc. Revenue received in the form of cash and other cash equivalents, i.e., convert into cash. Revenue Formula = Quantity x Sales price Revenue types definition of revenue are defined into two types, usually in business parlance, first one is direct revenue and indirect revenue i.e. noncore activities. Direct revenues are sales or net sales from direct activities. Some business firm has interest and commission also. Indirect revenues are from secondary activities which is noncore operations. It is recorded as other income in the income statement. It is not from regular business activity. The group revenues are in the above two different activities are disclosed in the income statement. Examples of revenue definition of revenue is gives different meaning. In the revenue account it is shown in the following as- Sales revenue or receipts, Fees revenues or receipts, Turnover, Interest Revenue, Commission Income, Sale of goods and services, etc., For government department, revenue is in the form of taxation, fees, fines, grants, sale of securities, sale of rights, etc., For business organisation like, partnership, companies, revenues are from selling goods and availing services. Gross profit is computed from Company Revenue minus cost of goods sold. Net profit ratio is also computed from sales revenue. Accounting method for revenue In the double entry accounts the revenues definition are recorded based on the following accounting method- Cash basis or Receipt basis accounting, Accrual basis or mercantile basis accounting. Revenue Recognition: In accounting, revenue […]
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