Rent from an income-producing property is typically collected and reported as part of which section on the income statement?

• A. Operating expenses
• B. Net sales
• C. Other revenues and gains
• D. Cost of goods sold

Answer: (C)

Verified step by step guidance

1. Understand the structure of the income statement, which typically includes sections such as revenues, expenses, gains, and losses.
2. Recognize that rent from an income-producing property is not part of the primary operations of a business unless the business is specifically in the real estate rental industry.
3. Identify that 'Operating expenses' refer to costs incurred during the normal operations of the business, such as salaries, utilities, and rent paid (not rent received).
4. Note that 'Net sales' refers to revenue generated from the sale of goods or services, which does not include rent income.
5. Conclude that rent income from an income-producing property is categorized under 'Other revenues and gains,' as it is considered a secondary source of income outside the core business operations.