Question

What would normally go under the Operating Section?

1) Income and expenses
2) Assets and liabilities
3) Cash flows
4) Equity

Answer 1

The operating section of a financial statement includes 1) income and expenses that represent the day-to-day activities of a business. Hence, option 1) is correct.

Step-by-step explanation:

The operating section of a financial statement typically includes income and expenses. This section represents the day-to-day activities of a business and shows the revenue generated and the expenses incurred in operating the business. Examples of items that would go under the operating section include sales revenue, salaries and wages, rent, utilities, and advertising expenses.

For example, in the case of an insurance company, the operating section would include the premiums collected from policyholders as income and the payment of claims and operating expenses as expenses. This helps to assess the profitability of the insurance company's core business operations.