As the result of the business, we might receive revenue. The revenue comes from company activity such as sales, hire, fee, etc. Reversely, sometimes the revenue could cover the cost.For example, a software company get revenue from software sales, royalty, training cost, maintenance cost, service cost, etc.

What is revenue? I think most people will answer money or cash.  Today most people use credit card to buy anything. It is difficult to determine the revenue if you think the revenue is cash.

We should remember accrual concept that recognize revenue when the product is sold or when the service is performed. The credit sales does not affect the revenue recognition and it amount is recorded into receivable.In business environment, some customer might not settle this debt. The customer may not have money, may forget to pay, and may be a bad customer.

According Wild, Subramanyam and Halsey (2002), revenue recognition criteria:

• Earning activities creating revenue are substantially complete, and no significant effort is necessary to complete the transactions
• Risk of ownership in sales effectively passed to the buyer
• Revenue and associated expense are measured or reasonable accuracy
• Revenue recognized normally yields an increase in cash, receivables, or securities. Under certain conditions it yields an increase in inventories or other assets or decrease in liabilities
• Revenue transaction is at arm's length with an independent party(ies) (not with controlled parties)
• Revenue transaction is not revocation (such as a right of return)   

If the company could not receive the receivable, so where we record the journal. We might allocate the uncollectible to an account which name is uncollectible receivable. In business practices, the company determine the percentage of uncollectible receivable. For example, A company determine uncollectible receivable percentage is 5% of sales. The determine of the percentage base on the history data and the economic condition.