revenue

Definitions (2)

1. For a company, this is the total amount of money received by the company for goods sold or services provided during a certain time period. It also includes all net sales, exchange of assets; interest and any other increase in owner's equity and is calculated before any expenses are subtracted.

Net income can be calculated by subtracting expenses from revenue.

In terms of reporting revenue in a company's financial statements, different companies consider revenue to be received, or "recognized", different ways. For example, revenue could be recognized when a deal is signed, when the money is received, when the services are provided, or at other times. There are rules specifying when revenue should be recognized in different situations for companies using different accounting methods, such as cash basis and accrual basis accounting.

2. For the government, the increase in assets of governmental funds that do not increase liability or recovery of expenditure. This revenue is obtained from taxes, licenses and fees.

See also: List of Key Accounting Terms and Definitions at InvestorGuide.com.

Use revenue in a sentence

Thanks to the new management team I've hired and the new business plan we are moving forward with, our revenue from this point on should go through the roof.

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If the marginal cost of producing another unit exceeds the marginal gain from selling it then a company should not increase production volume, because although this will increase revenue, it will decrease profit.

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After selling 20 jars of jam for $5 a piece, she was quickly able to calculate her revenue at $100. While she would have to deduct expenses, she was able to quickly determine the amount she was bringing in.

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