Which of the following is income?

Which of the following is income?

• A. Sales revenue
• B. Rent expense
• C. Salaries
• D. Purchases

Answer: (A)

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.