What is Revenue and Expenses? Definition with Accounting Examples


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Revenue Definition:

In financial accounting, an inflow of money usually from sales or services thru business activities is called as revenue. It is also known as sales or turnover of the business. In other words, an income to a business or an organisation is termed as revenue. For example: royalties or interest or copyright fees may be a part of income for some business. Whereas services offered to customers may be the element of revenue for some companies. For non-profitable businesses, donations from organizations, corporate, individuals are termed as revenue.

A business or a company may have various types of revenue accounts. Bottom line is all this revenue accounts are termed as income for it. For example: company may receive cash on sale of assets, company may receive cash on rental property and many more. These accounts are broadly divided into operating or non-operating revenue accounts.

Operating Revenue Definition:

Any income generated by company’s or an organisation’s core business activities are known as operating revenue. An example of operating income includes: income from software development and services for Apple or IBM. Rental income on property for landlord. Ievenue from professional consultancy and services for law firms, consultancy and services firms, etc. All this activities are termed as operating income for a business.

Non-operating Revenue Definition:

Any income generated by company apart from its business operations are known as non-operating revenue. It is also termed as other incomes for businesses. An example of non-operating income includes: income from banks interest on savings account. Income generated from sale of assets or business properties, etc. All this activities are termed as non-operating income for a business.


Wiki Finance pedia - e-learning course on Accounting Wikipedia Chapter - Revenue and ExpensesExpenses Definition:

In financial accounting, an outflow of money is called as expenses or expenditure. For example: rent may be the part of expenses for tenant. Tuition fees for children may be the element of expenses for parents. For a business, electricity bills, bank charges, sales expense, telephone bills, repair and services are termed as expenses. Expenses may include in a type cash payment like salaries, electricity bills, wages, etc. or in a type of assets depreciation like machinery, building, furniture, land, etc. All this expenses are charged in profit and loss statement as a loss from the income.

List of expenses in accounts frequently observed when preparing financial statements:

  • Salaries and wages.
  • Cost of goods sold.
  • Legal fees.
  • Depreciation.
  • Repair and Services.
  • Administration expenses.
  • Property taxes.
  • Finance costs.
  • Advertising expenses.
  • Travelling expenses.
  • Utility expenses.
  • Entertainment expenses.


- Tutorial Course - Basics of Accounting for Beginners -

» e-Learning Chapter 1: What is Accounting and objectives of Accounting?

» e-Learning Chapter 2: What is Assets and Current Assets?

» e-Learning Chapter 3: What is Liability and Current Liabilities?

» Currently Reading: What is Revenue and Expenses?

» e-Learning Chapter 5: What are the Types of Accounts?

» e-Learning Chapter 6: What is a Single Entry System?

» e-Learning Chapter 7: What is Double Entry Accounting System?

» e-Learning Chapter 8: What are the steps involved in Accounting Process Cycle.

» e-Learning Chapter 9: What are Journal Entries? Format and Examples.

» e-Learning Chapter 10: What Is a General Ledger? Format with Example.

» e-Learning Chapter 11: What is a Trial Balance? Examples and Limitations.

» e-Learning Chapter 12: What is a profit and loss statement or Income Statement?

» e-Learning Chapter 13: What is a Balance Sheet? Definition, Format and Examples.

» e-Learning Chapter 14: What are the Different Types of Accounting Methods in Bookkeeping.

» e-Learning Chapter 15: Accounting Quiz – Basics of Accounting for Beginners Module.


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