Revenue
The total income generated from selling goods or services before expenses are deducted, representing the top line of the income statement and initial measure of business activity.
Revenue
The total income generated by a business from its primary activities of selling goods or providing services before any expenses are deducted, representing the “top line” of the income statement.
For instance, a retail store generates revenue when it sells merchandise to customers, a consulting firm when it provides advisory services, and a subscription software company when it delivers access to its platform, whether payment is received immediately or promised for later.
Revenue recognition follows specific accounting principles ensuring income is recorded when earned (upon transfer of goods or services), not necessarily when cash is received. Revenue serves as a fundamental measure of business activity and market acceptance, forming the basis for profitability metrics. While high revenue growth often signals business expansion, it must be analyzed alongside profit measures to evaluate sustainable economic performance.