What Is Revenue

What Is Revenue
What Is Revenue

Video: What Is Revenue

Video: What Is Revenue
Video: What is Revenue? 2024, November
Anonim

Revenue is the aggregate of funds received on the accounts of an enterprise as a result of its production activities for a certain period of time. Revenue is the source of a commercial organization's own financial resources.

What is revenue
What is revenue

Revenue can come from several areas of the enterprise:

- from the main activity (proceeds from the sale of goods, works, services);

- from investment activities. Revenue is reflected in the form of a financial result from the sale of non-current assets and the sale of securities;

- from financial activities. This proceeds is the result of the placement among investors of the company's securities (stocks and bonds).

In accounting, revenue is recognized as cash that meets the following requirements:

- the company has the right to receive them, which follows from the relevant contract;

- there is confidence that economic benefits will increase after conducting business operations;

- the ownership of the goods being sold has passed from the seller to the buyer;

- the costs that were spent on this business transaction can be accurately determined.

The proceeds from the sale of products are reflected in the accounting by one of the possible methods: by the method of shipment of goods and presentation of settlement documents to the counterparty (accrual method) or by the method of payment, i.e. on the actual receipt of funds to the accounts of the organization (cash method). In the first case, the date of shipment is considered the moment of sale of goods and receipt of proceeds, in the second - the date of receipt of money on the accounts.

The amount of revenue is influenced by many factors. Some of them depend directly on the activities of the enterprise. These factors include the volume of production and sales, the range of products, their quality, competitiveness, price level, used forms of payment, compliance with contractual conditions. Factors that do not depend on the activities of the enterprise include a violation of the supply of resources, late payment for products due to the buyer's insolvency, and transport failures.

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