Lesson 7.3 Account Title: Revenue

Question 1

REVENUE FOR SERVICE BUSINESS

• Amounts earned from providing services to clients, either for cash or on credit. When a service is provided on credit, both this account and Accounts Receivable will increase.

Answer 1

Service Revenue

Question 2

REVENUE ACCOUNTS FOR MERCHANDISING AND MANUFACTURING BUSINESSES

• It contains the record of all sales transactions. This includes both cash and credit sales. The account total is then paid with sales return and allowances account to derive the net sales figure that is listed in the income statement.

Answer 2

Sales

Question 3

REVENUE ACCOUNTS FOR MERCHANDISING AND MANUFACTURING BUSINESSES

• A contra revenue account that reports
  1 merchandise returned by the customer, and
  2 the allowances granted to a customer because the seller shipped improper or defective merchandise.
  Sales return occur when customers agree to keep merchandise in return for a reduction in the selling price. These reduce the seller’s account receivable and is subtracted from sales (along with sales discounts) to arrive at net sales.

Answer 3

Sales Return and Allowances

Question 4

REVENUE ACCOUNTS FOR MERCHANDISING AND MANUFACTURING BUSINESSES

• It is a reduction in the price of a product or service that is offered by the seller, in exchange for early payment by the buyer.

Answer 4

Sales Dicsount