Not All Income Is Revenue
A company may have other income streams, which are not related to its main operations. Examples include:
These are not recorded as revenues, but rather as Other Income, and are accounted for on the income statement in a line below revenues.
Sale of crude oil by Exxon Mobil Sale of books by Amazon.com Sale of hamburgers by McDonald’s
|
1. CVS
Exercise
Q1: | In February 2005, CVS, a drugstore chain, recorded the following transactions:
Sold $500m in merchandise Sold $100m in prescriptions Won a legal settlement of $400m Collected $20m in interest income from a bank account
Record total revenues for CVS in February 2005.
|
|
1. CVS
Solution
Q1: | Record total revenues for CVS in February 2005.
| | | Sold $500m in merchandise | | Sold $100m in prescriptions | | Won a legal settlement of $400m | | Collected $20m in interest income from a bank account | | Total revenue = $600m (merchandise and prescriptions) | | Legal settlement and interest income are not part of revenues (nonoperating income). |
|
|
..................Content has been hidden....................
You can't read the all page of ebook, please click
here login for view all page.