Revenues– Revenues are the property earned by a company’s operations and trade actions. Revenues refer to the amount received from day to day activities of the business, like sale profits of goods and depiction services to the consumers. It is the total of currency that a business in fact receives during a exact stage, including discounts and deductions for returned commodities. Rent received, payment received, royalties and interest received are measured as revenue, as they are usual in nature and apprehensive with day to day activities. It is shown in the credit side of the profit and loss account or trading account.
Revenue is calculated by multiplying the cost at which goods or services are sold by the number of units or amount sold.
Expenses– Expenses refer to those expenses that are incurred to earn income for the trade. It signify the cost of doing business where doing business is the sum total of the activities directed towards assembly an earnings. It is incurred for maintaining prosperity of the business. It indicates the amount spent to meet short-term needs of the business. It is shon in the debit side of the profit and loss account or trading account. For example, wages, rent paid, salaries paid, outstanding wages, etc.