What is sales revenue?
The purpose of the enterprise, as a rule, is to generate income from the sale of goods and (or) the provision of services. For the required period: year, quarter or month - the amount of money that is received by the company as a result of its work activity is calculated. That's what sales revenue is.
Revenue is sometimes confused with profit, but these are completely different concepts. When calculating profit from revenue, you must subtract the amount of expenses of the enterprise for the reporting period.
In addition to the sale of goods, revenue can be obtained from issuing shares or bonds, placing capital at interest, other manipulations with the assets of the company, that is, from financial and investment activities.
It is considered to consider revenue in two ways:
- Cash method, when calculated the amount of all funds that have been received during the reporting period on the current account or in the cash desk of the company.
- The accrual method, when the sum of the value of the goods shipped or the services rendered is added without taking into account the receipt of funds.