Term of the Day revenue

Term of the Day


  1. For a company, this is the total amount of money received by the companyfor goods sold or services provided during a certain time period. It alsoincludes all net salesexchange of assetsinterest and any other increasein 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, differentcompanies consider revenue to be received, or “recognized”, differentways. For example, revenue could be recognized when a deal is signed, when the money is received, when the services are provided, or at other times. There are rules specifying when revenue should be recognized in different situations for companies using different accounting methods, such as cash basis and accrual basis accounting.

  2. For the government, the increase in assets of governmental funds that do not increase liability or recovery of expenditure. This revenue is obtained from taxeslicenses and fees.