Which element of the income statement represents income and expenses that are not generated by the usual course of business and are not considered extraordinary?

• A. Other Revenue/Expense
• B. PreTax Income
• C. Net Income
• D. Operating Revenue

Answer: (A)

The key idea is separating what comes from core operations from items outside normal business activities. The income statement shows operating revenue and operating expenses to reflect ongoing, day-to-day business performance. Non-operating items—things not part of the usual course of business—are shown separately. The line for Other Revenue/Expense serves as the catch-all for these non-operating items (such as interest, gains or losses from asset sales, foreign exchange effects, etc.). These are not part of normal operations, and they’re not categorized as extraordinary items, so they’re presented separately to show their impact on pre-tax income. PreTax Income includes both operating and non-operating results, Net Income is after tax, and Operating Revenue covers core business activity.