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Service Revenue

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Definition of Service Revenue

Service Revenue Image 1

Service Revenue

revenue recognized from the provision of services as opposed to the sale of
products.



Related Terms:

Internal Revenue Service

A federal agency empowered by Congress to interpret and enforce tax-related laws.


Concentration services

Movement of cash from different lockbox locations into a single concentration
account from which disbursements and investments are made.


Debt service

Interest payment plus repayments of principal to creditors, that is, retirement of debt.


Debt-service coverage ratio

Earnings before interest and income taxes plus one-third rental charges, divided
by interest expense plus one-third rental charges plus the quantity of principal repayments divided by one
minus the tax rate.


Debt service parity approach

An analysis wherein the alternatives under consideration will provide the firm
with the exact same schedule of after-tax debt payments (including both interest and principal).



Fictitious Revenue

revenue recognized on a nonexistent sale or service transaction.


Full-service lease

Also called rental lease. Lease in which the lessor promises to maintain and insure the
equipment leased.


Service Revenue Image 2

grade (of product or service)

the addition or removal of product
or service characteristics to satisfy additional needs, especially price


incremental revenue

the revenue resulting from an additional contemplated sale


Index Portfolio Rebalancing Service (IPRS)

Index Portfolio Rebalancing service (IPRS) is a comprehensive investment service that can help increase potential returns while reducing volatility. Several portfolios are available, each with its own strategic balance of Index Funds. IPRS maintains your personal asset allocation by monitoring and rebalancing your portfolio semi-annually.


Industrial revenue bond (IRB)

Bond issued by local government agencies on behalf of corporations.


Information services

Organizations that furnish investment and other types of information, such as
information that helps a firm monitor its cash position.


Internal Revenue Code

Refers to all federal tax laws as a group.


McNamara-O'Hara Service Contract Act of 1965

A federal Act requiring federal contractors to pay those employees working on a federal contract at
least as much as the wage and benefit levels prevailing locally.


NET SALES (revenue)

The amount sold after customers’ returns, sales discounts, and other allowances are taken away from
gross sales. (Companies usually just show the net sales amount on their income statements, omitting returns, allowances, and the like.)


Non-financial services

Include such things as freight, insurance, passenger services, and travel.


Service Revenue Image 3

Premature Revenue

revenue recognized for a confirmed sale or service transaction in a period
prior to that called for by generally accepted accounting principles.


Product/service mix

See sales mix.



Realizable Revenue A revenue transaction where assets received in exchange for goods and

services are readily convertible into known amounts of cash or claims to cash.


Realized Revenue

A revenue transaction where goods and services are exchanged for cash or
claims to cash.


Revenue

Income earned from the sale of goods and services.


Revenue

Amounts earned by the company from the sale of merchandise or services; often used interchangeably with the term sales.


Revenue

An inflow of cash, accounts receivable, or barter from a customer in exchange
for the provision of a service or product to that customer by a company.


Revenue bond

A bond issued by a municipality to finance either a project or an enterprise where the issuer
pledges to the bondholders the revenues generated by the operating projects financed, for instance, hospital
revenue bonds and sewer revenue bonds.


revenue center

a responsibility center for which a manager is accountable only for the generation of revenues and has no control over setting selling prices, or budgeting or incurring costs


revenue-driven expenses

Operating expenses that vary in proportion to
changes in total sales revenue (total dollars of sales). Examples are sales
commissions based on sales revenue, credit card discount expenses, and
rents and franchise fees based on sales revenue. These expenses are one
of the key variables in a profit model. Segregating these expenses from
other types of expenses that behave differently is essential for management
decision-making analysis. (These expenses are not disclosed separately
in externally reported income statements.)


Revenue fund

A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.


Service Revenue Image 4

Revenue Recognition

The act of recording revenue in the financial statements. revenue should
be recognized when it is earned and realized or realizable.



Sales Revenue Revenue recognized from the sales of products as opposed to the provision of

services.


service company

an individual or firm engaged in a high or moderate degree of conversion that results in service output


service department

an organizational unit that provides one or more specific functional tasks for other internal units


service time

the actual time consumed performing the functions
necessary to provide a service


Short-term investment services

services that assist firms in making short-term investments.


Total revenue

Total sales and other revenue for the period shown. Known as "turnover" in the UK.


Unearned revenue

Money that has been paid by customers for work yet to be done or goods yet to be provided.


Unearned revenue

A payment from a customer that cannot yet be recognized as earned
revenue, because the offsetting service or product for which the money was paid has
not yet been delivered.


Uniformed Services Employment and Reemployment Rights Act of 1994

A federal act that minimizes the impact on people serving in the Armed Forces
when they return to civilian employment by avoiding discrimination and increasing
their employment opportunities.


benefits-provided ranking

a listing of service departments in an order that begins with the one providing the most service
to all other corporate areas; the ranking ends with the
service department providing service primarily to revenueproducing
areas


capital asset

an asset used to generate revenues or cost savings
by providing production, distribution, or service capabilities
for more than one year


direct method

a service department cost allocation approach
that assigns service department costs directly to revenueproducing
areas with only one set of intermediate cost
pools or allocations


Federal Employer Identification Number

A unique identification number issued
by the federal government used for payroll purposes to identify the company
when it deals with the Internal revenue service.


gross margin, or gross profit

This first-line measure of profit
equals sales revenue less cost of goods sold. This is profit before operating
expenses and interest and income tax expenses are deducted. Financial
reporting standards require that gross margin be reported in
external income statements. Gross margin is a key variable in management
profit reports for decision making and control. Gross margin
doesn’t apply to service businesses that don’t sell products.


Gross profit

The difference between the price at which goods or services are sold and the cost of sales.
Income The revenue generated from the sale of goods or services.


Net realizeable value

The expected revenue to be gained from the sale of an item or
service, less the costs of the sale transaction.


Production payment financing

A method of nonrecourse asset-based financing in which a specified
percentage of revenue realized from the sale of the project's output is used to pay debt service.


Sales

Amounts earned by the company from the sale of merchandise or services; often used interchangeably with the term revenue.


step method

a process of service department cost allocation
that assigns service department costs to cost objects after
considering the interrelationships of the service departments
and revenue-producing departments



 

 

 

 

 

 

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