BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -When your small business collects cash from a customer at the time of a sale, your cash account increases by the amount collected and your revenue account increases by the same amount. Cash is an asset account. Revenue increases stockholders’ equity.

Detailed explanation-2: -This increase in assets also creates an offsetting increase in the stockholders’ equity part of the balance sheet, where retained earnings will increase. Thus, the impact of revenue on the balance sheet is an increase in an asset account and a matching increase in an equity account.

Detailed explanation-3: -Growth in assets or decreases in liabilities from one period to another constitutes a use of cash and reduces cash flows from operations.

Detailed explanation-4: -Increasing revenue can result in higher costs and lower profit margins. Cutting costs can result in diminished sales and also lower profit margins if market share is lost over time. Focusing on branding and quality can help sustain higher prices on sales and ensure higher profit margins over the long term.

Detailed explanation-5: -Accrued Revenue In accrual accounting, revenue is reported at the time a sales transaction takes place and may not necessarily represent cash in hand. Revenue eventually impacts cash flow figures but does not automatically have an immediate effect on them.