Income vs. Revenue

Difference Between Income and Revenue Revenue and income are two important components of a financial statement. A thorough…

Difference Between Income and Revenue

Revenue and income are two important components of a financial statement. A thorough reading of the company’s financial statement reveals that the first entry is of sales or revenue generated. It is the figure that shows the amount of cash flow in business for the time period covered by the statement. This is an important figure for the profit or income, business must generate sales. So revenue is nothing but the money made by a business through all its endeavors – whether by selling products or providing services. Income on the other hand, refers to the money the company has after deducting all the expenses from the sales and revenues. These expenses include payments to employees, electricity bills, taxes, interest on loans and all other such things that are done to keep the business running.

A small figure entry in the company’s financial system’s revenue column, it is a plain indication of the fact that the company is has lesser chances of being in profit. For companies that are beginning their business, initial costs are too high. It is quite easy to sum such companies up the ones who, if, are able to show decent revenues, have a very good potential in the coming days or years. In accounting practice, income is still used in the context of net income. Net income is the same as profit. Statement of income is one of the most important financial statements of an organization and the basic premise of the statement of income is all expenses subtracted from total revenue is equal to net income. In other words,

Revenues – All expenses = Net Income

Income is indicative of sales in any financial statement and the first entry in any financial statement.

Income means profit and it is the last entry in any financial statement.


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