Cash versus non-cash revenue

is the revenue shown in the income statement for a period is actually the pure cash sales & can we say credit sales are account receivables?plz clear my doubt

1 Answer(s)


Rohit - No, the revenue you see in the income statement includes cash and accounts receivables.

For example - If you sell a product/service for Rs. 1,000 this month. That Rs.1,000 is recorded in your income statement as revenue (doesn't matter if you got the cash or not). If you got the cash, your cash account in the balance sheet increases. If it was a credit sale, the accounts receivable increases. In both these cases the shareholders equity also increases by the same amount to balance the balance sheet.

Hopefully this answers your questions. Please feel free to send any clarifications.

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