Florida General Contractor Practice Exam

Which of the following is NOT a category included in the income statement according to the contractor's manual?

1. Revenue from Sales

2. Operating Expenses

3. Liabilities

4. Net Profit

The correct answer is: Liabilities

The income statement primarily includes categories that reflect a company's performance over a specific accounting period, focusing on revenues and expenses to determine net profit. The categories typically featured include revenue from sales, operating expenses, and the resulting net profit. Liabilities, on the other hand, are not included in the income statement; instead, they are recorded on the balance sheet, which captures a company's financial position at a given point in time. Liabilities represent what a company owes and is part of the broader financial health assessment, but they do not contribute directly to the determination of profit or loss within the income statement framework. Thus, recognizing that liabilities belong to the balance sheet rather than the income statement accurately identifies why this answer is correct. The other categories—revenue from sales, operating expenses, and net profit—are fundamental to the construction of income statements, reflecting the company's revenue generation and expense management during the reporting period.