What type of income is received that is not directly from regular trading activities?

Prepare for the Pittsburgh Institute of Mortuary Science Test with interactive quizzes and detailed explanations. Enhance your knowledge and get ready to excel on your exam!

The correct answer is "Other income" because this term specifically refers to income that is not derived from the primary operating activities of an entity, such as a business. In accounting, "other income" typically includes revenues from secondary sources, like interest earned on investments, rental income, or any gains from the sale of assets that are not part of the main business operations.

In contrast, "Revenue" generally encompasses all income generated from primary activities, such as the sale of goods and services. "Operating income" is a measure of the profit made from the core operations of the business, excluding any expenses that are non-operational. "Net income," on the other hand, is the total profit of a company after all expenses, including taxes and interest, have been deducted from total revenues.

Understanding the distinction between these terms is crucial for clear financial reporting and analysis, as it helps stakeholders assess the performance and financial health of an organization beyond just its primary operations.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy