Accounting TERMINOLOGY BULLETINS
Committee on Terminology
American Institute of Certified Public Accountants 270 Madison Avenue, New York 16, N. Y.
Proceeds, Revenue, Income, Profit, and Earnings
1. The terms revenue, income, profit, and earnings refer to closely related concepts. In general, they relate to the increase (or decrease if negative) in the owners' equity which results from operations of an enterprise. They are, therefore, to be distinguished from receipts such as collection of receivables, and from proceeds of a loan or bond issue, or the capital contributions by owners.
2. The committee has examined the usage of these terms in accounting, economic, and legal literature and believes that the lack of uniformity found in practice is unfortunate and confusing. To promote uniformity of usage, the following definitions and recom-mendations are made for the use of these terms in connection with business operations and financial statements. The term proceeds also is included in the list of terms considered.
DEFINITIONS AND RECOMMENDATIONS
Proceeds is a very general term used to designate the total amount realized or received in any trans-action, whether it be a sale, an issue of stock, the collection of receivables, or the borrowing of money.