Crash Course in Accounting and Financial Statement Analysis, Second Edition

Not All Income Is Revenue

A company may have other income streams, which are not related to its main operations. Examples include:

• Interest income earned from investments

• Income received from a legal settlement

These are not recorded as revenues, but rather as Other Income, and are accounted for on the income statement in a line below revenues.

Examples of Revenues Sale of crude oil by Exxon Mobil Sale of books by Amazon.com Sale of hamburgers by McDonald’s

1. CVS

Exercise Q1: In February 2005, CVS, a drugstore chain, recorded the following transactions: Sold $500m in merchandise Sold $100m in prescriptions Won a legal settlement of $400m Collected $20m in interest income from a bank account Record total revenues for CVS in February 2005.

1. CVS

Solution Q1: Record total revenues for CVS in February 2005. Sold $500m in merchandise Sold $100m in prescriptions Won a legal settlement of $400m Collected $20m in interest income from a bank account Total revenue = $600m (merchandise and prescriptions) ...