Revenue is defined as.

Revenue is defined as.

• A. A decrease in owner's equity
• B. An increase in cash
• C. A decrease in expenses
• D. An increase in owner's equity resulting from the sale of goods/services of a business

Answer: (D)

Revenue is the increase in owner's equity that comes from selling goods or providing services. It reflects the earnings from normal business activities and, under accrual accounting, is recognized when the sale happens, regardless of when cash is received. This means revenue can be recorded even if payment is on credit, in which case accounts receivable increases, not cash. Revenue boosts net income, which in turn increases retained earnings and overall owner's equity. It is not a decrease in owner's equity, nor simply an increase in cash or a decrease in expenses. So the description that matches revenue best is an increase in owner's equity resulting from the sale of goods or services.

Revenue is the increase in owner's equity that comes from selling goods or providing services. It reflects the earnings from normal business activities and, under accrual accounting, is recognized when the sale happens, regardless of when cash is received. This means revenue can be recorded even if payment is on credit, in which case accounts receivable increases, not cash. Revenue boosts net income, which in turn increases retained earnings and overall owner's equity. It is not a decrease in owner's equity, nor simply an increase in cash or a decrease in expenses. So the description that matches revenue best is an increase in owner's equity resulting from the sale of goods or services.