Examples of Nonoperating Items That Would Appear on an Income

question 86

Multiple Choice

Examples of nonoperating items that would appear on an income statement are:

• A) Interest income, sales salaries, gain on sale of land.
• B) Income taxes, interest expense, loss on sale of investments.
• C)Interest expense, gain on sale of equipment, loss on sale of investments.
• D)Depreciation expense, interest income, interest expense.

---

Definitions:

Call Profits

Profits realized from exercising call options, where the investor has the right to buy an asset at a predetermined price before the option expires.

Exercise Price

The predetermined price at which the holder of an option can buy (call option) or sell (put option) the underlying security or commodity.

Market Price

The current price at which an asset or service can be bought or sold in the market.

Strike Price

The fixed price at which the holder of an options contract can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.