Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What does non-operating revenue refer to?

1. Amounts earned from regular business operations

2. Amounts earned from selling long-term assets

3. Amounts earned outside of selling services

4. Amounts spent on operational costs

The correct answer is: Amounts earned outside of selling services

Non-operating revenue refers to income generated from activities that are not part of a company's core business operations. This type of revenue can include earnings from investments, dividends, or the sale of long-term assets, such as real estate or equipment. Such earnings are distinct from the revenue generated through the sale of goods and services that are central to the business's function. The significance of non-operating revenue lies in its ability to impact the overall financial performance of a business without being tied to its primary operations. For instance, if a real estate firm sells an investment property, the proceeds from that sale would be classified as non-operating revenue, as this transaction is not a part of the regular service offerings of the firm. In contrast, amounts earned from regular business operations refer to the income generated from selling a company's primary products or services. Amounts earned from selling long-term assets, while they may seem similar to non-operating revenue, specifically pertain to the sale of physical assets rather than a broader range of non-core activities. Lastly, amounts spent on operational costs deal with expenditures rather than income and are thus not relevant to the concept of revenue.