Question

What is meant by Revenue?

Answer 1

Revenue refers to the gross inflow of cash, receivables, or other considerations arising in the ordinary course of business activities. It is the gross money generated by an enterprise from selling its goods, rendering services to its customers, or letting others use its resources, which brings secondary income such as interest, dividends, royalties, and rent. In accounting, revenue is considered a “top-line” item because it represents the total earnings before any expenses, salaries, or taxes are subtracted. Earning revenue ultimately increases the owner’s capital, but it must be clearly distinguished from profit, which is only the net amount left over after all operating costs have been fully deducted from revenue.