Revenue Definition Accounting Quizlet

Under the accrual basis of accounting revenues are recorded at the time of delivering the service or the merchandise even if cash is not received at the time of delivery.

Revenue definition accounting quizlet. Often the term income is used instead of revenues. Furthermore as per the matching principle the expense should be matched with the revenue earned during the period to be regarded as revenue expenditure. Accrued revenue is the product of accrual accounting and the revenue recognition and matching principles. Amounts earned from the sale of products sales revenues service revenue and interest revenue.

Fees earned from providing services and the amounts of merchandise sold. A change made to a revenue or expense account on balance day so that revenue accounts show revenues earned and expense accounts show expenses incurred in a particular reporting period prepaid expense an expense paid in advance but yet to be consumed. The difference between the value of the total sales revenue of a business and the total costs involved in producing that output. Revenue inflows of economic benefits or savings in outflows in the form of increases in assets or decreases in liabilities that lead to an increase in owner s equity except capital contribution.

A financial statement showing the revenue and expenses for a fiscal period net income the difference between total revenue and total expense when total revenue is greater. If the expenses made by the firm helps in the generation of revenue for the current accounting period it is considered as an operational expense. Typically revenue is recognized when a critical event has occurred and the dollar amount is easily measurable to the company.