What is a revenue collection?
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What is a revenue collection?
Revenue collection frequently refers to a government agency billing the public or a member of the public for fines, taxes or any other fees. However, revenue collection is also the general collection of revenue for debts owed or owed revenue by persons or businesses.
What are the three types of revenue?
Revenue comes in various forms—sales revenue, rental revenue, dividend revenue, etc—and is made up of two important parts: the cost and the number of units sold of each product or service.
What are examples of revenue streams?
Examples of Revenue Streams
- Subscription fees (e.g., monthly fees for Netflix)
- Renting, leasing, or lending assets.
- Licensing content to third parties.
- Brokerage fees.
- Advertising fees.
Is revenue the same as net profit?
Revenue is defined as the income generated through a business’ primary operations. It is often referred to as “top line” and is shown at the top of an income statement. Net Profit is the value that remains after all operating expenses are subtracted from a company’s revenue.
How do you identify revenue?
GAAP Revenue Recognition Principles
- Identify the customer contract.
- Identify the obligations in the customer contract.
- Determine the transaction price.
- Allocate the transaction price according to the performance obligations in the contract.
- Recognize revenue when the performance obligations are met.
How do you identify warranty revenue?
The core principle is supported by the following five steps in recognizing revenue:
- Identify the customer contract(s)
- Identify the performance obligation(s) in the contract.
- Determine the transaction price.
- Allocate the transaction price to the performance obligation(s) in the contract.
How do you record warranty revenue?
The initial accounting entry shows a debit to the warranty expense account and a credit to the warranties payable account of $500,000. If an actual warrantied repair costs $200, debit that amount to the warranties payable account and credit it to the cash account.
How do I make a warranty provision?
Under the matching principle of accounting, the estimated cost of honoring the warranty contracts should be recognized in the period that the sales occur. And then, the liability which is provision for warranty expense will be settled when the company reimburses or repairs defective or damaged products for customers.
What are the conditions for the recognition of a warranty?
Warranty expense is recognized in the same period as revenue for the sold products if there is a probability that an expense will be incurred and if the company can estimate the amount of the expense.
