Join Rudolph Rosenberg for an in-depth discussion in this video Difference between revenue and cash, part of Financial Literacy: Reading Financial Reports.
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- [Voiceover] So what's the difference…between revenue and cash?…The income statement reports revenue,…while the cash-flow statement reports cash.…The big difference between the two is the payment.…As we have seen previously,…the generation of revenue occurs when the invoice is sent,…and until a payment is made.…A debt exists between the customer and supplier.…When you eat at a restaurant, for example,…at the end of the meal the check is brought to you.…In accounting terms, the restaurant gives you an invoice.…During the five minutes between…receiving the check and paying it,…you actually owe money to the restaurant.…
During those five minutes,…the restaurant has generated revenue…equal to the amount of the check,…but no cash, since you have not paid.…In accounting terms, again,…the revenue is recorded right away on the income statement.…As revenue, and in the balance sheet as accounts receivable.…If you remember, this is the category for money…owed by customers to the company.…At the end of the five minutes,…you pay the bill and are no longer…
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- What is a financial statement?
- Reading the balance sheet
- Understanding depreciation, liabilities, and equity
- Reading the income statement
- Understanding revenue, costs, profitability, and net income
- How cash flow works
- Analyzing financial documents with context<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
Skill Level Appropriate for all
1. Financial Statements
2. The Balance Sheet
3. The Income Statement
4. The Cash Flow Statement
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