Revenues and Receipts: Defining the Difference

by Vincent / 2018-10-01 / Published in B-Accounting, Blog
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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: 

Revenues

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).

Receipts

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:

  • Borrowing cash from banks
  • Payments received from customers that had purchased goods and/or services on credit 30 days earlier
  • Disposing of company vehicles and receiving cash equal to the vehicle’s book value
  • Receiving repayment cash from an employee who had previously borrowed from the company
  • Payments from investors for new shares in the company’s common stock

Need Help?

 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. 

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