Revenues is the gross inflow of cash, receivable (debtors and bills receivable) or other consideration arising in the course of the ordinary activities of an enterprises from the sale of goods, from the rendering of services and from the use by others of enterprise resources yielding interest, royalties and dividends. Thus it would be found that all revenues of a given period are the receipts of cash, debtors, bills receivable, etc., from the main activities of an enterprise such as: (i) selling products or raw materials or both as the case may be; (ii) performing the services, (iii) receipt of interest, dividends, rent, royalties etc., from the use of enterprises resources by others. Revenues do not include inflow of assets acquired by purchase, proceeds from borrowing, capital introduced by the owner(s) or adjustment of revenues of earlier or prior periods.

Operating Vs. non-operating revenues:

There is no uniform practice among accountants, to distinguish between operating and non-operating revenues, the former results from the trading activities of a business enterprise such as revenues from sales or installments in the case of installment sales. On the other, interest, dividends from investment, rents from building etc. constitute non-operating revenues must be distinctly stated for a proper evaluation of business income.

For more help in Recognition of Revenues click the button below to submit your homework assignment