The income generated from sale of goods or services, or any other use

of capital or assets, associated with the main operations of an organization before

any costs or expenses are deducted. Revenue is shown usually as the top item in an income

(profit and loss) statement from which all charges, costs, and expenses are subtracted to

arrive at net income. 

The impressive revenue figures shown on our profit and loss statement were reduced

significantly after our monthly business expenses were deducted.

Revenue is the amount of money that a company actually receives during a specific period,

including discounts and deductions for returned merchandise. It is the "top line" or "gross

income" figure from which costs are subtracted to determine net income.

Revenue is calculated by multiplying the price at which goods or services are sold by the

number of units or amount sold.

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.

Revenue is the money you collect for providing a product or service.

Revenue is different from earnings, which is what's left of your revenue after subtracting the 

costs of producing or deliveringthe product or service and any taxes you paid on the amount y

ou took in.

When corporations release their financial statements, those that provide services, such as pow

er or telecommunicationscompanies, describe their income as revenues, while those that man

ufacture products, such as lightbulbs or books,describe their income as sales.

The money a government collects in taxes is also called revenue. The US body that collects t

hose taxes is called theInternal Revenue Service (IRS). In the United Kingdom, it's Inland Re

venue.

The total rent, sales, or earnings of a company. When negotiating for the purchase of income-

producing property, be sure toinquire about the seller's definition of revenue rather than make 

the assumption that the seller is using the correctterminology to describe figures supplied to y

ou. Contrast with income.

Revenue is a crucial part of financial statement analysis. The company’s performance is measured to the

extent to which its asset inflows (revenues) compare with its asset outflows (expenses). Net income is the

result of this equation, but revenue typically enjoys equal attention during a standard earnings call. If a

company displays solid “top-line growth”, analysts could view the period’s performance as positive even if

earnings growth, or “bottom-line growth” is stagnant.

Revenue is used as an indication of earnings quality. There are several financial ratios attached to it, the most important being gross margin and profit margin. Also, companies use revenue to determine bad debt expense using the income statement method.

Different Types of RevenueAt a high level, we'll start by splitting revenue into "operating" and "non-operating." Operating revenue is much like we've already described:

income from sales, services provided, etc. It's the money you earn from the

core activities of your business. Non-operating revenue can be thought of

as income on the side, perhaps passive. It's money earned that falls

outside your business' core offerings.

And this is where the different types of revenue:

Operating revenues are those that come in to a business from the company’s main or core business activities. This is the area through which a company earns most of its income. A software development company generates revenues by developing software or modules. Examples of operating revenue: Sales, rental income or providing services. Operating revenue is considered as the lifeblood of any

company, as the high amounts of operating revenue is indicative of having or maintaining stable cash position.Non-operating revenue or other income includes revenues earned from a company’s outside of its normal operations. These are the revenues that are associated with secondary operations of a business entity – not with main, central or core activities. An example of non-operating revenue is the income generated from the sale of subsidiary or division. Since it’s not to be sold again, the income is a one- time occurrence. It may further be understood this way; for example, if an institution is offering training and development services, the main source of revenue (operating revenue) is associated with the training and development activities being regarded as core operations of the institution. Since the institution might receive gifts, bequests or donations, it is to be recorded as non-operating revenue as such revenue might not be associated with the main activities of the institution.

The common revenue accounts are as follows:-Revenue/sales/fess – These accounts are used to record the revenues earned from the main activities of a business entity. It is better to assign particular names to the accounts, so that the identification and the required analysis may be made smoothly.Interest revenue – This revenue comes from an investment- usually from bank.Rental revenue – it is used to record the revenue that is received by providing rental services, such as, building, equipment etc.Dividend revenue – It is recorded when dividend on the stock is earned from other companies that pay dividends.In addition, it is important to mention contra revenue accounts. Contra revenue accounts, as the name suggests, have apposite nature of accounts. They are contrasted with revenue accounts. Such as,

sales return and sales discounts. Both are used to offset the relevant accounts or to reduce the value of the related account. It’s a way of better portraying the relationship between certain debits and credits.