Question

A company completed the following transactions during the month of​ October: I. Purchased office supplies on​ account, $ 5 comma 800$5,800. II. Provided services for​ cash, $ 23 comma 000$23,000. III. Provided services on​ account, $ 33 comma 000$33,000. IV. Collected cash from a customer on​ account, $ 27 comma 000$27,000. V. Paid the monthly rent of $ 4 comma 400$4,400. What was the​ company's total revenue for the​ month?

Answer 1

Answer:

Total revenue= $56000

Explanation:

Revenue in accounting is defined as the income generated by a company or business from the sale of goods or rendering of services. In accounting based on the accrual concept, revenues are recorded when they occur and not necessarily when cash is paid. In other words, credit sales also counts as revenue in account.

In this question these are the transactions that count as revenue

1. Provided services for cash $23000

2. provided services on account $33000 ( This means credit sales)

Thus, total revenue for the month = 23000 + 33000= $56000

Note: collected cash from a customer on account does not imply sales, its a reduction in accounts receivable.

Profit is not the same as revenue. Profit (net income) is revenue minus expenses.