The amount that a business earns by selling goods or providing services is called revenue.
Remuneration for goods sold or services provided is called revenue. It includes both cash received for goods sold and services rendered and accounts receivable for goods sold and services rendered on credit.
Revenues that appear in the trial balance are of the following two kinds:
- Direct revenue
- Indirect revenue
Revenue earned from routine activities of the business, such as the revenue generated from the sale of goods and rendering services to customers, is known as direct revenue. It is credited to the trading account.
Revenues earned through activities other than the routine activities of the business are called indirect revenues. The following items are included in indirect revenues:
- Commission Received
- Interest Received
- Rent Received
- Discount Received
- Discount from Creditors
- Discount on Purchases
- Dividend Received
- Interest on Drawings
- Reserve for Discount on Creditors
- Interest Received on Renewal of Bills
- Bad Debts Recovered
- Provision for Bad Debts (Cr. Balance)
- Royalty Received
- Apprentice Premium
- Miscellaneous Income
- Sundry Income
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