What Is Revenue in Accounting?

Q: Is revenue the same as income?

Often used interchangeably. Income can also mean net profit, and some countries say turnover or sales for revenue.

How businesses record the money they earn, with a worked example.

Quick answerRevenue is the income a business earns from selling goods or providing services during a period, before any expenses are deducted. It is the top line of the income statement.

Also called	Sales, turnover, fees earned
Normal balance	Credit
Topic	Financial accounting · Income statement

Revenue in plain English

Revenue is what you earn from your main activity. Under accrual accounting, revenue is recorded when it is earned, not when the cash arrives. Profit is what is left after expenses: Profit = Revenue − Expenses.

Worked example

A consultant finishes a job and invoices the client 2,000. The cash will arrive next month, but the revenue is earned now.

Account	Debit	Credit
Accounts receivable	2,000
Service revenue		2,000

When the client pays, you debit Cash and credit Accounts receivable. No new revenue is recorded.

Common mistakes

Counting a bank loan or owner investment as revenue. Neither is earned from trading.
Recording revenue only when cash is received, which breaks accrual accounting.

Frequently asked questions

What is the difference between revenue and profit?

Revenue is total earnings before costs. Profit is revenue minus expenses.

Is revenue the same as income?

Often used interchangeably. “Income” can also mean net profit, and some countries say “turnover” or “sales” for revenue.

Is revenue a debit or a credit?

Revenue increases with a credit.

Keep learning

This page is for general learning. Accounting rules vary by country and standard.