Other income and expenses are items that are not related to the primary operating activity.

Glossary
Chapter 6
account form The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and Liabilities and Owner's Equity sections on the right side.
administrative expenses (general expenses) Expenses incurred in the administration or general operations of the business.
cost of merchandise purchased The cost of net purchases plus transportation costs.
cost of merchandise sold The cost that is reported as an expense when merchandise is sold.
credit memorandum (credit memo) A form used by a seller to inform the buyer of the amount the seller proposes to credit to the account receivable due from the buyer.
credit period The amount of time the buyer is allowed in which to pay the seller.
credit terms Terms for payment on account by the buyer to the seller.
debit memorandum (debit memo) A form used by a buyer to inform the seller of the amount the buyer proposes to debit to the account payable due the seller.
FOB (free on board) destination Freight terms in which the seller pays the transportation costs from the shipping point to the final destination.
FOB (free on board) shipping point Freight terms in which the buyer pays the transportation costs from the shipping point to the final destination.
freight in Costs of transportation.
gross profit Sales minus the cost of merchandise sold.
income from operations (operating income) Revenues less operating expenses and service department charges for a profit or an investment center.
inventory shrinkage (inventory shortage) The amount by which the merchandise for sale, as indicated by the balance of the merchandise inventory account, is larger than the total amount of merchandise counted during the physical inventory.
invoice The bill that the seller sends to the buyer.
merchandise available for sale The cost of merchandise available for sale to customers calculated by adding the beginning merchandise inventory to net purchases.
merchandise inventory Merchandise on hand (not sold) at the end of an accounting period.
multiple-step income statement A form of income statement that contains several sections, subsections, and subtotals.
net purchases Determined when purchases returns and allowances and the purchases discounts are deducted from the total purchases.
net sales Revenue received for merchandise sold to customers less any sales returns and allowances and sales discounts.
other expense Expenses that cannot be traced directly to operations.
other income Revenue from sources other than the primary operating activity of a business.
periodic inventory system The inventory system in which the inventory records do not show the amount available for sale or sold during the period.
perpetual inventory system The inventory system in which each purchase and sale of merchandise is recorded in an inventory account.
purchase return or allowance From the buyer's perspective, returned merchandise or an adjustment for defective merchandise.
purchases discounts Discounts taken by the buyer for early payment of an invoice.
report form The form of balance sheet with the Liabilities and Owner's Equity sections presented below the Assets section.
sales The total amount charged customers for merchandise sold, including cash sales and sales on account.
sales discounts From the seller's perspective, discounts that a seller may offer the buyer for early payment.
sales returns and allowances From the seller's perspective, returned merchandise or an adjustment for defective merchandise.
selling expenses Expenses that are incurred directly in the selling of merchandise.
single-step income statement A form of income statement in which the total of all expenses is deducted from the total of all revenues.
trade discounts Discounts from the list prices in published catalogs or special discounts offered to certain classes of buyers.
Other income and expenses are items that are not related to the primary operating activity.

Are other expenses included in operating income?

Operating income is the amount of income a company generates from its core operations, meaning it excludes any income and expenses not directly tied to the core business.

What is non operating expenses and income?

Key Takeaways A non-operating expense is a cost from activities that aren't directly related to core, day-to-day company operations. Examples of non-operating expenses include interest payments and one-time expenses related to the disposal of assets or inventory write-downs.

Which is not considered as an operating income?

Non-operating income is the portion of an organization's income that is derived from activities not related to its core business operations. It can include items such as dividend income, profits, or losses from investments, as well as gains or losses incurred by foreign exchange and asset write-downs.

What is the other income?

Definition of 'other income' Other income is income that does not come from a company's main business, such as interest. Examples of other income include income from interest, rent, and gains resulting from the sale of fixed assets.