what is revenue 
revenue is the money generated from normal business operations calculated as the average sales price times the number of units sold it is the top line or gross income figure from which costs are subtracted to determine net income revenue is also known as sales on the income statement investopedia matthew collinsunderstanding revenuerevenue is the money brought into a company from its business activities over a specified period of time such as a quarter or year before subtracting expenses there are different ways to calculate revenue depending on the accounting method employed accrual accounting will include sales made on credit as revenue for goods or services delivered to the customer under certain rules revenue is recognized even if payment has not yet been received 123cash accounting on the other hand will only count sales as revenue when payment is received cash paid to a company is known as a receipt it is possible to have receipts without revenue for example if the customer paid in advance for a service not yet rendered or undelivered goods this activity leads to a receipt but not revenue 1the financial accounting standards board s revenue from contracts with customers topic 606 is a regularly revised set of accounting rules that guide companies on how to report revenue the guidance requires an entity to recognize revenue in accordance with five steps it is necessary to check the cash flow statement to assess how efficiently a company collects money owed revenue is known as the top line because it appears first on a company s income statement net income also known as the bottom line is revenues minus expenses there is a profit when revenues exceed expenses to increase profit and hence earnings per share eps for its shareholders a company increases revenues and or reduces expenses investors often consider a company s revenue and net income separately to determine the health of a business net income can grow while revenues remain stagnant because of cost cutting such a situation does not bode well for a company s long term growth 