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What are Revenues?

Definition: Revenues are income a company receives in its day-to-day business operations

Revenues are made in large part with the sale of goods and services. There are other ways of making revenue however, such as from interest, dividends, or royalties paid to a business by another company.

Any amount that is generated with the use of capital or assets, which are associated with the main operations of the business before any costs or expenses are deducted is also known as revenue.

Where it appears in the Financial Statements

Revenues can be found at the top of the Income Statement, above the section of Expenses. The reason the Income Statement is constructed in such a way is to calculate Net Income, which is equal to Revenues - Expenses.

How to Record Revenues

Revenues are increased on the Credit side, and are recognised in the financial statements depending on the financial standards the business is using.

Accrued Revenues

Funds that have been earned, but not received as of the end of the reporting period. Reported as an asset on the balance sheet, until cash is received at a later time.

 

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