How to Figure Total Revenue Recorded in an Accounting Ledger

by Eileen Rojas; Updated September 26, 2017
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Total revenue is the sum of the balances of all revenue accounts found in an entity’s accounting records or ledger. Revenues have credit balances and the transactions with the greatest impact on these accounts are earnings related to cash and credit sales. For companies that provide services instead of products, services revenue is recorded when services are performed or completed. Revenue is reported separately per product or service item on the entity’s income statement.

Step 1

Identify sales revenue accounts. Sales revenue is earned when the product sold has changed hands and the buyer has paid, or made a promise to pay, for the product. Sales transactions credited to the sales revenue accounts have corresponding debits posted to cash or accounts receivable.

Step 2

Identify service revenue accounts. Service revenue is earned when a service has been performed or completed in accordance with a contractual agreement specifying the services requested. Revenue transactions recorded to service revenue have corresponding debits posted to cash or accounts receivable.

Step 3

Add the balances of the revenue accounts. The sum of sales revenue and service revenue equal total revenue. For entities with several product or service lines, revenues are recorded and reported separately for each product or service.

About the Author

Eileen Rojas holds a bachelor's and master's degree in accounting from Florida International University. She has more than 10 years of combined experience in auditing, accounting, financial analysis and business writing.

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