Revenue
Definition
Revenue is income the business earns from selling goods or services. Revenue is recorded when it is earned, which is not always the same as when cash is received.
Example
Northstar Creative completes $2,000 of work and sends an invoice. Revenue of $2,000 is recorded now, even though the customer will pay next month.
Why It Matters
Revenue is the top line of the P&L. Recording it correctly — and not confusing it with cash received — is essential for accurate profit.