Sales Revenue: Definition, Overview, & Examples

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Revenues are the assets earned by a company’s operations and business activities. In other words, revenues include the cash or receivables received by a company for the sale of its goods or services. To illustrate why revenues are credited, let’s assume that a company receives $900 at the time that it provides a service and therefore is earning the $900. The increase in the company’s assets will be recorded with a debit of $900 to Cash.

Microsoft’s operating revenue comes from software development and creation because it is a software company. The historic trend of revenue is analyzed, and revenue for future periods is forecasted. All expenses below sales revenue are often found expressed as a percentage of that revenue. As the first item listed on a financial statement, it becomes the pivot or anchor from which other line items are proportional to. Recording accrued revenue as a part of accrual accounting can help a business be agile by anticipating expenses and revenues in real-time.

What Does Sales Revenue Include?

A credit reduces these accounts, which are assets, on the balance sheet. In general usage, revenue is the total amount of income by the sale of goods or services related to the company’s operations. Sales revenue is income received from selling goods or services over a period of time. Tax revenue is income that a government receives from taxpayers.

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