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Revenue

Revenue

Every type of business will essentially require revenue. It is a type of income earned when sale of goods and services takes place. When revenue is earned without eliminating the costs and expenses (overheads, wages, sundry expenses, etc) then it is termed as Gross Revenue. On the other hand, the money that is left at the end of the day after subtracting the expenses and costs is called the Net Revenue.

Revenue, however, is not the same as profit. If your expenses and costs to bring in revenue surpass the income from the sales of good and service, then you have clearly lost money.

Different types of revenues:

There are two basic types of revenues:

  1. Non operating revenue: This is earned from 'side activity' such as interest revenue.
  2. Operating revenues: These are derived from the core business operations, such as sales of goods and services.

How to calculate revenue:

To compute revenue, the basic formula below is used:

Revenue = Quantity X Price

The amount of revenue is determined using two things: first, the total number of items sold and, second, the selling price of each item.

For example; Company ABC sold 2000 boxes of chocolate, at $30 per box, then: 2000 X $30 = $60000

Revenue accounts:

  • Sales/fees: These take into account the main revenue amounts, such as fees earned.
  • Interest revenue: This account records all the interest that is earned through the business activity.
  • Rent revenue: These take into account all the revenue from the property or equipment of the operating business that is on rent.
  • Dividend revenue: It accounts for all the dividend accumulated on the stock owned by the business.

Revenues are fundamental when evaluating accounting or financial ratios, such as the GMP (gross margin percentage). When a company receives revenue, it is usually listed on the income statement's first line, and is termed as revenue, sales, net revenue or net sales. Under governments, the revenue is the money that is availed through taxes, fines, government grants or subsidies, bonds and other securities, or any sales made. More so, for nonprofit organizations, revenue is termed as 'gross receipts' that basically includes the donations collected from companies, individuals or governments, fundraising activities, investments and membership fees.


Further Reading

Optimum welfare and maximum revenue tariffs under oligopolyOptimum welfare and maximum revenue tariffs under oligopoly
ideas.repec.org [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

Turkish budget deficit sustainability and the revenue-expenditure nexusTurkish budget deficit sustainability and the revenue-expenditure nexus
www.tandfonline.com [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

Normative versus positive theories of revenue assignments in federationsNormative versus positive theories of revenue assignments in federations
ideas.repec.org [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

Government revenue and government expenditure nexus: evidence from developing countriesGovernment revenue and government expenditure nexus: evidence from developing countries
www.tandfonline.com [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

The Nexus between Tax Revenue and Economic Growth in NigeriaThe Nexus between Tax Revenue and Economic Growth in Nigeria
ideas.repec.org [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

Collar options to manage revenue risks in real toll public‐private partnership transportation projectsCollar options to manage revenue risks in real toll public‐private partnership transportation projects
www.tandfonline.com [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

Asymmetric modelling of the revenue-expenditure nexus: Evidence from aggregate state and local government in the USAsymmetric modelling of the revenue-expenditure nexus: Evidence from aggregate state and local government in the US
www.tandfonline.com [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

Revenue insurance purchase decisions of farmersRevenue insurance purchase decisions of farmers
www.tandfonline.com [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …

The Lerner index and revenue maximizationThe Lerner index and revenue maximization
www.tandfonline.com [PDF]
The latest edition of this valuable book updates all previous material and incorporates much new material. It includes a consideration of the problems of and methods for controlling public spending, the relative merits of income tax and a direct expenditure tax, the changes …


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Section 508

WCAG 2.0

Section 508