Which of the following is not a component of other income while preparing the statement of profit and loss by the company?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- Proceeds from the sale of scrap.
Proceeds from the sale of scrap is not a component of other income while preparing the statement of profit and loss by the company.
*Scarp is the leftover material after the production process for a non-financial business. Hence, it is considered as a revenue of operation, not other income.
Other income:
(i) Interest income (in case of a company other than a finance company),
(ii) Dividend income,
(iii) Net gain/loss on sale of investments,
(iv) Other non-operating income (net of expenses directly attributable to such income).