In: Accounting
example of Reporting Net vs. Gross Revenue"
gross revenue reporting
when gross revenue is recorded,all income from a sale is accounted for on the income statement.there is no consideration for any expenditures from any source.gross revenue reporting seperates the sales and cost of goods sold.for example if a cricket bat maker sold a bat for $100, even though the bat cost $40 to make.
gross sales $100
cost of goods sold $40
gross profit $60
net revenue reporting
net revenue reporting only listr what's left on the bottom line, calculated by substracting the cost of goods sold from gross revenue . for the same cricket bat maker the net revenue for the $100 bat he sold,which cost $40 to make, would be $60.from that $60, he would deduct any other costs such as rent,wages for other staff,packaging and so on.anything that comes as a cost to the cricket bat maker would be deducted from the net revenue $100
net sales $100
costs of goods sold $40
wages and salaries $15
rent $5
net profit $40