Which of the following is income?

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Study for the AAT Level 2 Introduction to Bookkeeping Test. Use flashcards and multiple choice questions with hints and explanations. Prepare effectively for your exam!

Multiple Choice

Which of the following is income?

Explanation:
Income is the money a business earns from its trading activities. Sales revenue is exactly that: the money received from selling goods or providing services, so it increases the business’s equity. Rent expense and salaries are costs the business pays; they reduce profit and do not count as income. Purchases are goods bought for resale or use and are recorded as assets or costs, not revenue. So the item that represents income is Sales revenue.

Income is the money a business earns from its trading activities. Sales revenue is exactly that: the money received from selling goods or providing services, so it increases the business’s equity. Rent expense and salaries are costs the business pays; they reduce profit and do not count as income. Purchases are goods bought for resale or use and are recorded as assets or costs, not revenue. So the item that represents income is Sales revenue.

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