Question

All of the following accounts would appear in the Other Revenue section of an income statement except Interest Income, Rent Income, Gain on Plant Assets, Sales.

A True
B False

Answer 1

Sales would not appear in the Other Revenue section of an income statement as it represents the primary revenue for a company, whereas Interest Income, Rent Income, and Gain on Plant Assets are considered other revenues.

Step-by-step explanation:

The question asks which account would not appear in the Other Revenue section of an income statement. The correct answer is Sales. In a typical income statement, Interest Income, Rent Income, and Gain on Plant Assets are indeed considered other revenues or gains because they are not the primary operations of a business. On the other hand, Sales represent the primary revenue stream for a company from the sale of goods or services. Therefore, Sales would not be included in the Other Revenue section but rather in the main revenue section of the statement.

The correct answer is that Sales would not appear in the Other Revenue section of an income statement. In an income statement, items like Interest Income, Rent Income, and Gain on Plant Assets are categorized as Other Revenues or gains because they are ancillary to the primary operations of the business. These sources of income are distinct from the core revenue generated by a company's primary operations. Conversely, Sales, representing the primary revenue stream from the sale of goods or services, would not be classified as "Other Revenue" but rather be featured in the main revenue section of the income statement. Properly categorizing revenue streams is essential for financial transparency, allowing stakeholders to discern the core operational income from additional sources that contribute to the overall financial performance of the business.

Answer 2

Sales is not included under 'Other Revenue' in an income statement; This section is for incidental income like Interest and Rent Income, and Gain on Plant Assets.

Step-by-step explanation:

Sales would not typically be included under the 'Other Revenue' section of an income statement. 'Other Revenue' often refers to income that a business earns which is not from its main operation such as Interest Income, Rent Income, and Gain on Plant Assets. These are considered to be peripheral or incidental to the business's main activities. Sales, on the other hand, represent the primary stream of income for most businesses and would therefore be listed as part of the main operating revenues rather than 'Other Revenue'.

As for the information provided from various chapters, it states that dividends from stocks and interest from bonds are recorded as an income import, confirming that this kind of income should be reported in 'Other Revenue' but not implying that sales should be included in that category.