Skip to main content

Business Finance EBK HEALTHCARE FINANCE: AN INTRODUCTION

Reporting of nonoperating income separately from revenue and circumstances in which it might not be presented separately. Non-operating income represents those earnings of the business entity which do not arise out of the normal operations of the entity, that is, these are those earnings which have risen out of activities which are not the core business activities of the entity. Revenue on the other hand represent receipts or receivables which have risen out of the normal transactions for which the business entity has been established or which represent core business activities. All forms of business reporting are designed around the idea of generating ‘information’ out of raw data so that the users of this information can make informed decisions. The purpose of presenting nonoperating income separately from revenue is to facilitate the users of financial information to assess the ability of the business entity to generate recurring revenue from its operations. Non-operating income is generally not consistent and therefore relying on its certainty could mislead the users or readers of financial statements.Presentation of nonoperating income separately is an accounting practice based on the financial reporting framework within which the business entity operates.When an income statement is prepared using single step method, no classification is made regarding operating profits and non-operating profits. This method prevents proper analysis as the source of revenue is not clearly defined.

Reporting of nonoperating income separately from revenue and circumstances in which it might not be presented separately. Non-operating income represents those earnings of the business entity which do not arise out of the normal operations of the entity, that is, these are those earnings which have risen out of activities which are not the core business activities of the entity. Revenue on the other hand represent receipts or receivables which have risen out of the normal transactions for which the business entity has been established or which represent core business activities. All forms of business reporting are designed around the idea of generating ‘information’ out of raw data so that the users of this information can make informed decisions. The purpose of presenting nonoperating income separately from revenue is to facilitate the users of financial information to assess the ability of the business entity to generate recurring revenue from its operations. Non-operating income is generally not consistent and therefore relying on its certainty could mislead the users or readers of financial statements.Presentation of nonoperating income separately is an accounting practice based on the financial reporting framework within which the business entity operates.When an income statement is prepared using single step method, no classification is made regarding operating profits and non-operating profits. This method prevents proper analysis as the source of revenue is not clearly defined.

EBK HEALTHCARE FINANCE: AN INTRODUCTION

EBK HEALTHCARE FINANCE: AN INTRODUCTION

6th Edition

ISBN: 9781567937428

Author: Gapenski

Publisher: YUZU

See similar textbooks

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

Blurred answer

Chapter 3, Problem 11.1STQ

Chapter 3, Problem 12.1STQ

Students have asked these similar questions

In what way do revenues and expenses differ from each other?

How does EVA differ from accounting net income?

How does accrued but uncollected revenue affect the bal-ance sheet?

Chapter 3 Solutions

EBK HEALTHCARE FINANCE: AN INTRODUCTION

Ch. 3 - Prob. 1.1STQ Ch. 3 - Prob. 1.2STQ Ch. 3 - Prob. 2.1STQ Ch. 3 - Prob. 2.2STQ Ch. 3 - Prob. 2.3STQ Ch. 3 - Prob. 3.1STQ Ch. 3 - Prob. 3.2STQ Ch. 3 - Prob. 3.3STQ Ch. 3 - Prob. 3.4STQ Ch. 3 - Prob. 3.5STQ

Ch. 3 - Prob. 4.1STQ Ch. 3 - Prob. 4.2STQ Ch. 3 - Prob. 4.3STQ Ch. 3 - Prob. 5.1STQ Ch. 3 - Prob. 5.2STQ Ch. 3 - Prob. 5.3STQ Ch. 3 - Prob. 6.1STQ Ch. 3 - Prob. 6.2STQ Ch. 3 - Prob. 7.1STQ Ch. 3 - Prob. 7.2STQ Ch. 3 - Prob. 7.3STQ Ch. 3 - Prob. 8.1STQ Ch. 3 - Prob. 8.2STQ Ch. 3 - Prob. 8.3STQ Ch. 3 - Prob. 8.4STQ Ch. 3 - Prob. 9.1STQ Ch. 3 - Prob. 9.2STQ Ch. 3 - Prob. 9.3STQ Ch. 3 - Prob. 10.1STQ Ch. 3 - Prob. 10.2STQ Ch. 3 - Prob. 11.1STQ Ch. 3 - Prob. 11.2STQ Ch. 3 - Prob. 12.1STQ Ch. 3 - Prob. 12.2STQ Ch. 3 - Prob. 12.3STQ Ch. 3 - Prob. 13.1STQ Ch. 3 - Prob. 13.2STQ Ch. 3 - Prob. 13.3STQ Ch. 3 - Prob. 13.4STQ Ch. 3 - Prob. 14.1STQ Ch. 3 - Prob. 14.2STQ Ch. 3 - Prob. 14.3STQ Ch. 3 - Prob. 15.1STQ Ch. 3 - Prob. 15.2STQ Ch. 3 - Prob. 16.1STQ Ch. 3 - Prob. 16.2STQ Ch. 3 - Prob. 3.1Q Ch. 3 - Prob. 3.2Q Ch. 3 - Prob. 3.3Q Ch. 3 - Prob. 3.4Q Ch. 3 - Prob. 3.5Q Ch. 3 - Prob. 3.6Q Ch. 3 - Prob. 3.7Q Ch. 3 - Prob. 3.8Q Ch. 3 - Prob. 3.9Q Ch. 3 - Prob. 3.1P Ch. 3 - Prob. 3.2P Ch. 3 - Prob. 3.3P Ch. 3 - Prob. 3.4P Ch. 3 - Prob. 3.5P Ch. 3 - Prob. 3.6P Ch. 3 - Prob. 3.7P Ch. 3 - Prob. 3.8P Ch. 3 - Prob. 3.9P

Knowledge Booster

Background pattern image

Similar questions

Recommended textbooks for you

Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Quickbooks Online Accounting
Accounting
ISBN:9780357391693
Author:Owen
Publisher:Cengage
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage

Text book image

Managerial Accounting

Accounting

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:South-Western College Pub

Text book image

Managerial Accounting: The Cornerstone of Busines...

Accounting

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Cengage Learning

Text book image

Quickbooks Online Accounting

Accounting

ISBN:9780357391693

Author:Owen

Publisher:Cengage

Text book image

Business/Professional Ethics Directors/Executives...

Accounting

ISBN:9781337485913

Author:BROOKS

Publisher:Cengage

SEE MORE TEXTBOOKS