MANAGEMENT

Detailed explanation-1: -Interest expense is considered as a non-operating expense of an organization because it has been incurred for carrying out the financial activities. So, it would be recorded in the income statement under the heading non-operating expenses or other expenses and losses.

Detailed explanation-2: -When doing a multiple step income statement, one must remember the key elements. They are: Net Sales, Cost of Goods Sold, Gross Profit, Total Operating Expenses, net gain/loss from other activities, Income before taxes, Income tax expense, and Net Income.

Detailed explanation-3: -Other expenses are expenses that do not relate to a company’s main business. As well as operating costs, the company needs to consider other expenses including interest expense and losses from disposing of fixed assets. Examples of other expenses include interest expense and losses from disposing of fixed assets.

Detailed explanation-4: -Other types of income that are commonly classified as other income are interest income, gains on the sale of assets, and gains from foreign exchange transactions.

Detailed explanation-5: -Most publicly-traded companies use multiple-step income statements, which categorize expenses as either direct costs (also known as non-operational costs), or indirect costs (also known as operational costs).