Answer to Question #189919 in Financial Math for Nachiket Pawar

Question

Love Doddle is a gifting enterprise of Ms. Dorati. The enterprise generates inflows by

arranging gift hampers for the customer's loved ones. The inflows arises from the sale of

gift hampers Rs 505000 and from bank interest, dividend receipt Rs4200. Ms. Dorati is

confused on how to record these inflows. She would like to understand from you about

the concepts Revenue from operation and other income, so that she can record the

information so as to prepare the profit and loss statement of the enterprise. Define, share

examples, and elaborate on your understanding towards the terms Revenue from

Operation and Other Income.

I want elaborated answer of this question

Answer 1

Revenue from operations refers to the revenue earned by a company from its normal operating activities such as net sales, or services rendered. It is the total amount of income generated by a company for the sale of its goods or services before any expenses are deducted.

Other income refers to income that does not come from a company’s core business. These are incomes generated by activities that do not relate to the normal core operations of the business. Examples include income from interest, rent, gains from the sale of fixed assets, currency

Revenue from operations is not recorded on the cash flow statement. It is used to calculate the net income in the income statement. Other incomes are also recorded in the income statement. They are added to the operating income to determine the net income.

The net income figure is what is recorded on the cash flow statement under operating activities.