Revenues are defined as:

• A. All sources of trade revenues flowing into the business for services rendered or goods sold, net of returns.
• B. The total amount of expenses.
• C. The cash balance in the company.
• D. The net income after taxes.

Answer: (A)

Revenue is the inflow earned from the business’s core activities—selling goods or providing services. It represents the top-line amount recognized from customers, recorded net of returns, refunds, or allowances. This reflects what the company earns from its operations, not its costs or profits. In accrual accounting, revenue is recognized when the performance obligation is satisfied, not necessarily when cash is received. This concept differs from expenses (the costs of operating) and from cash balance (an asset) or net income after taxes (profit remaining after all expenses and taxes).