Net Revenue
Definition: Gross revenue less returns, allowances, discounts
Scope:BroadDifficulty:Easy
Gross revenue less returns, allowances, discounts
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Record gross sales | ||
| Sell $10,000 of goods on account. | ||
| Accounts ReceivableAsset+ | $10,000 | |
| Sales RevenueRevenue+ | $10,000 | |
| Gross revenue recorded. | ||
| 2. Record sales return | ||
| Customer returns $500 of goods. | ||
| Sales Returns & AllowancesContra Revenue+ | $500 | |
| Accounts ReceivableAsset− | $500 | |
| Net revenue = $10,000 − $500 = $9,500. | ||
T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.
Accounts ReceivableAsset account — amounts owed by customers. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$10,000.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$500.00
$9,500.00
Sales RevenueRevenue account — income from selling goods or services. Credits increase the balance. Debits decrease the balance.RevenueIncome earned from business operations. Normal balance: credit. Credits increase, debits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$10,000.00
Normal bal. ▶
$10,000.00
Sales Returns & AllowancesSales Returns & AllowancesExpenseA cost incurred in the process of earning revenue. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$500.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$500.00
DurationN/A
Related Reports
- Income Statement(Primary — Top line)
- Form 10-K Annual Report(Primary — Revenue disaggregation)
External Links
- Revenue — Wikipedia