The Basics of Understanding Financial Statements: Learn how to read financial statements by understanding the balance sheet, the income statement, and the cash flow statement by Skonieczny Mariusz

Author:Skonieczny, Mariusz [Skonieczny, Mariusz]
Language: eng
Format: epub
Publisher: Investment Publishing
Published: 2012-06-01T00:00:00+00:00

OTHER INCOME AND EXPENSES

Other income and expenses result from sources not related to operating activities. Examples of such items include interest income on cash balances at the bank, gains and losses from asset sales, and other nonrecurring items. The negative number shown in Figure 27 represents income of $87 that helps to offset the interest expense of $805.

In the next chapter, which covers the cash flow statement, items, such as gains and losses from asset sales, that are included in the non-operating section of the income statement are taken out of the operating section of the cash flow statement and reclassified into other sections of the cash flow statement. This concept will become clearer in the next chapter.

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