Accounting Analysis

[Name of the Institute]

Revenue

Introduction

For an organization or the firm the revenue is the amount of money that the firm has received for the products or the services sold during a certain time period. The revenue includes the exchange of assets, all net sales, interest and an increased in the stock holders' equity. It is calculated before the subtraction of any expense. Net income is calculated using the revenue less all the expenses. For reporting revenue in term of the financial statements there is different consideration of revenue by different firms, or simple the revenue is recognized in different ways. If the firm's deal is received, when the money is received, any other times or the service is provided. There are various rules for the recognition of revenue for specific situations for the firms, using the accounting practices and methods for instance accrual basis of accounting or the cash basis of accounting. For the government the increase in the assets in the funds of government which will not increase the liability or the expenditure recovery. The revenue for the government is found from licenses, taxes and fees. The following paper will discusses about the “Revenue”, its different types, theories and accounting principles related with the revenue.

Discussion

Types of Revenues

Non Operating Revenues

Non operating revenues are those revenues that are not associated with the main activities of the firm. For instance for a hospital the non operating revenues can be funds that are given for the special purposes, revenues from gift shop in hospital, revenues from cafeteria, parking fees, income from hotel operations, or the rental income. For a bank the non operating revenues can be real estate, pension products, insurance etc, that are non banking activities (Al-Mayyahi, 2011).

Operating Revenues

The revenues that are derived from sources that are associated with the everyday operations of business. For instance the retail business has operating revenues such as sales of inventory, while the sale of a warehouse is the non operating revenue. The operating revenues is only associated about the daily operations of the business (Sun, 2011).

The revenue or the turnover in the business is the amount of income that is received by activities of firm, generally from the sale of the products of the services that the firm is offering. Revenue which is also called as the turnover is received by some firms from interest, other fees or royalties. It is generally referred as the amount in the monetary unit or the business income during the period. For instance if last year the firm's revenue is $54 million, net income or the profit implies usually the revenue minus expense in a given period of time. In the period of accounting revenue is also called as the ”top line” because the position of revenue in an income statement is at the top. The revenue or the turnover of the firm is compared and contrasted by the “bottom line” the profit or net income (Burkart, 2013).

In non- profit organizations the revenue on annual basis is referred as the ...