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Revenue transactions
The business transactions, which provide benefits or supplies services to a business concern for an accounting period only, are known as revenue transactions. Revenue transactions can be Revenue Expenditure or Revenue Receipt.
Revenue Expenditure
Revenue expenditures consist of those expenditures, which are incurred in the normal course of business. They are incurred in order to maintain the existing earning capacity of the business. It helps in the upkeep of fixed assets. Generally it is recurring in nature.
Characteristics
i. It helps in maintaining the earning capacity of the business concern.
ii. It is recurring in nature.
Examples
i. Cost of goods purchased for resale.
ii. Office and administrative expenses.
iii. Selling and distribution expenses.
iv. Depreciation of fixed assets, interest on borrowings etc.
v. Repairs, renewals, etc.
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Revenue Receipt
Revenue receipt is the receipt of income which is earned during the normal course of business. It is recurring in nature.
Characteristics
i. It is received in the normal course of business.
ii. It is recurring in nature.
Examples
i. Sale of goods or services.
ii. Commission and Discount received.
iii. Dividend and interest received on investments etc.
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