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CMA Intermediate · Financial Accounting · Final Accounts of Commercial Organisations

Which of the following items would be presented under 'Other income' (and not under revenue from operations) in the Statement of Profit and Loss of a manufacturing company under Schedule III?

Interest received on bank fixed deposits is shown under Other income for a manufacturing company. Sale of products, scrap sales and export incentives arise from operating activities and form part of revenue from operations, while deposit interest is a non-operating finance receipt.

  1. ASale of scrap generated in manufacturing
  2. BInterest received on fixed deposits with a bankCorrect
  3. CSale of manufactured products
  4. DExport incentive received as part of operations

Explanation

For a non-finance company, interest income on deposits is shown under Other income. Sale of products and sale of scrap are part of revenue from operations (sale of products or other operating revenue), and export incentives are other operating revenue. Hence only the interest on fixed deposits is other income.

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