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There’s an important difference when it comes to defining revenues and receipts - it’s key to understanding financial statements, particularly within a short period of time.
Here’s how you can easily define the two:
Put simply, this is how much a company has earned from business activities, including but not limited to: sales of merchandise and services.
Importantly, it also includes earnings from payments from a dependable customer when credit is offered; i.e. a customer is allowed to pay 60 days later (known as the accrual method in which revenues are reported on an income statement).
This refers directly to the amount of cash a company receives. I.e. it does not include agreements that will be paid at a later date.
Examples of receipts which are not classified as revenues include:
Specialist in Accounting Services in Bangkok, B-Accounting is the firm to contact to look beyond the numbers and removing the pain. Call us on +66 (0)2 234 4889 or check out our website.