What are inflows of assets resulting from performing a service or delivering a product?

Inflows of assets resulting from performing a service or delivering a product are classified as revenues. Revenues represent the earnings generated from a company's primary business activities, which include selling goods or providing services to customers. When a service is performed or a product is sold, the business receives compensation, typically in cash or accounts receivable, increasing its assets. This inflow is crucial to understanding a company’s performance and is a key indicator of its operational success.

In contrast, expenses refer to costs incurred in the process of earning revenues and do not contribute to asset inflows; they represent outflows. Liabilities are obligations a company owes to outside parties, and while they can lead to inflows when they are settled, they do not directly represent earnings from operations. Investments relate to funds that owners inject into the business, which also do not stem from ongoing operational activities. Understanding these distinctions helps clarify the financial reporting that defines a company's income statement and overall financial health.