Income vs. Revenue

Main Difference

The main difference between Income and Revenue is that the Income is a consumption and savings opportunity gained by an entity within a specified timeframe and Revenue is a income that a business has from its normal business activities.

• Income

  Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. For households and individuals, “income is the sum of all the wages, salaries, profits, interest payments, rents, and other forms of earnings received in a given period of time.”In the field of public economics, the concept may comprise the accumulation of both monetary and non-monetary consumption ability, with the former (monetary) being used as a proxy for total income.

  For a firm, gross income can be defined as sum of all revenue. Net income nets out expenses: net income equals revenue minus expenses.

  Increase in incomeIncome per capita has been increasing steadily in almost every country. Many factors contribute to people having a higher income, including education, globalisation and favorable political circumstances such as economic freedom and peace. Increases in income also tend to lead to people choosing to work fewer hours.

  Developed countries (defined as countries with a “developed economy”) have higher incomes as opposed to developing countries tending to have lower incomes.

• Revenue

  In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover.

  Some companies receive revenue from interest, royalties, or other fees. Revenue may refer to business income in general, or it may refer to the amount, in a monetary unit, earned during a period of time, as in “Last year, Company X had revenue of $42 million”. Profits or net income generally imply total revenue minus total expenses in a given period. In accounting, in the balance statement it is a subsection of the Equity section and revenue increases equity, it is often referred to as the “top line” due to its position on the income statement at the very top. This is to be contrasted with the “bottom line” which denotes net income (gross revenues minus total expenses).For non-profit organizations, annual revenue may be referred to as gross receipts. This revenue includes donations from individuals and corporations, support from government agencies, income from activities related to the organization’s mission, and income from fundraising activities, membership dues, and financial securities such as stocks, bonds or investment funds.

  In general usage, revenue is income received by an organization in the form of cash or cash equivalents. Sales revenue or revenues is income received from selling goods or services over a period of time. Tax revenue is income that a government receives from taxpayers.

  In more formal usage, revenue is a calculation or estimation of periodic income based on a particular standard accounting practice or the rules established by a government or government agency. Two common accounting methods, cash basis accounting and accrual basis accounting, do not use the same process for measuring revenue. Corporations that offer shares for sale to the public are usually required by law to report revenue based on generally accepted accounting principles or International Financial Reporting Standards.

  In a double-entry bookkeeping system, revenue accounts are general ledger accounts that are summarized periodically under the heading Revenue or Revenues on an income statement. Revenue account names describe the type of revenue, such as “Repair service revenue”, “Rent revenue earned” or “Sales”.