Meaning of Accountancy- The practice of recording, categorizing and reporting the transactions of the business is called Accountancy. By recording the transactions, we come to know about the financial position of an organization. The association between the revenue and accounting can be explained online in details and students can get the answers for their homework by taking online help for Accountancy and Revenue association homework answers. Let’s discuss few accountancy tasks in details.
- Recording of transactions–
This is a repetitive task and performed repeatedly. Recording the business transactions on a regular basis is important, and this task is performed by clerk, cashier, and accounts payable staff and billing staff. There are few accounting transactions which are non-repetitive which are recorded with the help of journal entries. To perform this task tax accountant, asset accountant and general ledger staff are involved.
- Classification or categorizing of transactions–
General ledger consists of many accounts, each one of which is of different types and made for different transactions such as sales, depreciation, doubtful debts, etc. classifying different transactions into different accounts help the shareholders and investors to understand the transactions better. Such information helps in preparing the internal management reports.
- Reporting–
reporting can be divided into few areas of specialization, which are as follows-
Financial accounting: This area deals with accumulation of business transactions into financial statements.
Management accounting: this area is concerned with improving the profitability of a business and presenting results to management. The structure of reports prepared in this are not pre-defined, it depends upon the need of the business.
What do you mean by Revenue in context of Accounting?
Revenue simply means the income earned by any business by selling goods and services to the end user. Revenue can also be called turnover or sales. For organizations which are not meant for earning profit, revenue can be defined as the receipts which include donations, government support, membership fees and securities like bonds, stock or speculative funds.
Where the double-entry system is followed in accounts, revenue accounts are general ledger accounts which are concise periodically under revenue in income statement with different kinds of revenue. To know more about the revenue linkages with accounting, one must take online help for Accountancy and revenue association homework answers.
Difference between the revenue from business’s primary activities and non-operating activity-
Revenues from selling goods is termed as revenues from primary activities of business. The interest which is received on deposits is termed as revenue but should not be counted in net sales. If a manufacturing company of automobiles will record revenue as regular one, but if they lent a share of their building and being paid an amount called rent then it will be considered under other revenue which is non-operating revenue.
Revenue and financial statement analysis-
Revenue can be considered as a decisive part of the statement. How is the company is performing can be estimated with the help of revenue. By the comparison of inflows and outflows (expense), company’s position can be measured. Various ratios are useful in determining the revenue such as profit margin and gross margin. Using the method of income statement companies can determine bad debts expenses as well. The importance of revenue to analyze financial statements can be known well by students online by preferring Accountancy and revenue association homework answers.
What is Government Revenue?
Government has agencies or departments which collect government revenue which can be taxes and fees from the companies as well as a distinct person. The revenue of government also includes currency notes which printing. There is always a question arises that whether the accounting standards based on business gives a fair view of government financial records or not.
Various Accounting terms-
- Net sales = gross sales – discounts, returns and allowances
- Gross profit = net sales – cost of goods sold
- Operating profit = Gross profit – total operating expenses
- Net profit = operating profit – taxes – interest
- Net profit = net sales – cost of goods sold – operating expenses – taxes – interest
The terms above are used in accounting are very important as these are often used to find out the profit. It is important to understand each one of them and how to calculate the profit using these terms. To get full details on this and to match answers to the given homework, students can prefer Accountancy and revenue association homework answers online.
What is the principle of Revenue recognition?
When accrual accounting and matching principle meets, the accounting period can be determined in which revenue and expenses are recognized. As per the rule of this principle, revenues are recognized when they are earned which means when goods and services are transferred and rendered respectively. It does not matter if the cash for the goods and services are received or not. And in contrast, revenues are recognized when the cash is received no matter the goods and services are sold or not in case of cash accounting.
When the revenues are recognized, two types of accounts can be found-
- Accrued revenue where revenue is acknowledged earlier the cash is received.
- Deferred revenue where revenue is acknowledged later the cash is received.
Revenue will be included in the income if it is realized during an accounting period.There are certain exceptions to the rule of revenues not recognized at the time of sale. Students must prefer online help for Accountancy and revenue association homework answers online for detailed information.
Criteria for revenue recognition when the goods are being sold-
- Risks and ownership have transferred to the buyer from the seller.
- Seller has no control over the goods which are sold.
- Payment is assured to be collected.
- The revenue can be measured.
- The costs involved in earning such revenue can be measured as well.
Important points regarding revenue recognition-
- If any advance is received, then it is not to be recognized as revenue but as liabilities until-
- Revenues are realized when cash are received in exchange for goods and services.
- Revenues are earned when goods and services are transferred.
- While selling inventory, revenues are recognized at the date of sale,e., date of delivery.
- In case of services, it is recognized when the services are completed, and bill has prepared.
- When an asset is sold, revenue is recognized at the point of sale, when it actually takes place.
Thus, we can say that accounting and revenue association are linked up and revenue is considered as an important term for accounts. Students generally face difficulties in revenue recognition. For complete guidance they must prefer Accountancy and revenue association homework answers online to get help from experts regarding completion of homework.