Florida General Contractor Practice Exam

Which term describes income that is not generated from the company's primary operations?

1. Net profit

2. Gross income

3. Other income

4. Operating income

The correct answer is: Other income

The term that describes income generated from sources outside of a company's primary operations is known as "Other income." This category typically includes revenue streams that are not directly related to the core business activities. For example, it can include interest earned on investments, rental income, or income from the sale of assets. In contrast, net profit refers to the total earnings after all expenses have been deducted from revenue, gross income is the total revenue received before any deductions are made, and operating income is derived from the primary activities of the business, reflecting earnings before interest and taxes are taken into account. Other income specifically serves to highlight the non-operational earnings, which is why this term is the most fitting in this context.