General Knowledge - Indian Economy - Discussion

Revenue from sales of the company, s product must not be shown in the balance sheet cause it would mean that the following sales have been made on credit. Which is not a favorable condition for the company, it may happen that the buyer of the goods may not be able to pay the money back later which will lead to "bad debts".

Balance sheet consists of Items which are either Assets or liabilities (For the Business). Value of Stocks held, Cash held in the Bank are Assets and Total issued and subscibed capital is a liability hence they appear in Balance-Sheet. Revenue from sales of Company's products is income and hence is reflected in Profit & Loss account, where net result of Business Operation for the period (for which financial results have been prepared) based on all income and expenditure during the period.

Can anyone from commerce background explain in detail point wise?

Why option A and D are wrong?

The sales realizations do not appear in the B/S. The question needs amendment.

This is right, because sales is that part of trading a/c. All sales which have been made where credit or in cash all fall in trading a/c. Then all the expenses is being debited in profit and loss a/c. So revenue from sale do not appear in balance sheet. It will show only debtor of company.

But, in balance sheet only subscribed capital comes. So I think answer should be B.

Revenue from sales of the company's products is so in the Trading and Profit and loss Account for calculating the Profit or loss of a company. Net Profit or Loss is shown on the Balance Sheet of a company.

Revenue means it is the income that a company receives from its business activities like sales of products or services etc..

Revenue can be to a company or to the government.

Government receives its revenue by imposing taxes and non taxable income as well.

It is come under profit & loss a/c because revenue comes from sale of the goods.

What is revenue?