Transaction revenue is money earned through an exchange of cash or credit for goods, services or assets. Businesses earn money from a variety of sources, including those that do not require a business transaction, such as interest earned or a lawsuit award. Depending on the type of transaction, revenue is classified as operating or non-operating revenue.
Operating revenue comes from transactions that involve the core profit-making activity of a business. Examples of transactions that produce operating revenue include the sale of goods a manufacturer produces or the sale of items a re-seller buys and then sells. For example, a manufacturer might make widgets and then sell them directly to consumers, or sell them to wholesalers or distributors who then sell them to customers. Payment for services, such as to a contractor who provides bookkeeping services, is operating revenue for the bookkeeper.
In addition to windfalls and capital gains, such as investment income, some non-operating revenue occurs via a transaction. Examples include the sale of real estate, machinery or vehicles. For accounting purposes, these revenues are not considered operating revenue because they come from one-time events and are not core business activities. These one-time transactional revenues might be classified as capital revenue or capital transactions rather than operating revenue or operating transactions.
- Digital Vision./Photodisc/Getty Images