For a plumbing company, the sale of what item is classified as other income on an income statement?

In accounting, the classification of income on an income statement helps businesses understand their financial performance more accurately. Other income typically refers to revenue generated from sources that are not part of the primary activities of a business. For a plumbing company, this would exclude income from regular plumbing services or products directly related to its core operations.

When a plumbing company sells an old truck, the proceeds from this sale are considered other income because the truck is not part of the company’s regular inventory or service-related activities. Instead, it falls under the category of capital assets, which are not part of the company’s ongoing revenue-generating activities. The sale of the old truck represents a transaction that is incidental to the company’s primary operations, and the revenue from this sale is reported under other income.

In contrast, selling old repair tools, new equipment, or inventory would typically be classified as revenue related to the core operations of the plumbing business, meaning they would be categorized differently on the income statement.