Final answer:
In a multiple-step income statement for a retail company, the operating section includes sales, cost of goods sold, and administrative and selling expenses. Dividend revenue is not included in the operating section as it is classified under non-operating revenues since it originates from investments outside the company's primary operations. b) Cost of goods sold.
Step-by-step explanation:
In the context of preparing financial statements for a retail company, the multiple-step income statement is a detailed financial report that separates operating revenues and expenses from non-operating ones. The operating section of this income statement typically includes several line items that are directly related to the core business activities. These line items traditionally comprise sales, or revenue from the sale of goods, cost of goods sold (COGS), reflecting the direct costs attributable to the production of the goods sold by the company, and administrative and selling expenses, which encompass the general and administrative costs associated with running the company as well as expenses related to the selling process such as advertising and salaries of sales staff.
However, not all types of revenue and expenses are included in the operating section. Specifically, dividend revenue is typically classified under the non-operating section because it is a form of income earned from investments in the securities of other companies rather than the primary operations of the retail business. Therefore, when discussing the contents of the operating section of a multiple-step income statement, dividend revenue would be the correct choice as the item not included in that section.
To summarize, a multiple-step income statement aims to distinctly showcase the financial results from operating activities apart from non-operating ones to provide a clear picture of a company's core profitability.