Question

select the option that reflects how revenue is typically organized on an income statement.

1. sales
2. other revenue
3. cost of goods sold

1. sales
2. cost of goods sold
3. other revenue

1. cost of goods sold

2 other revenue

1. sales

Explanation:

On an income statement, revenue is typically organized starting with "Sales" (the primary revenue from core operations), followed by "Other revenue" (non - core revenue sources). "Cost of goods sold" is a cost item, not a revenue item, so it should not be part of the revenue organization. So the correct order is 1. Sales, 2. Other revenue, 3. Cost of goods sold is incorrect in terms of revenue organization; the first option has the correct revenue - related order (Sales then Other revenue, with Cost of goods sold being a cost, but in the context of the options, the first option's order for revenue - related items is correct as Sales is primary revenue and Other revenue is secondary revenue, while Cost of goods sold is a different category). Wait, actually, the first option's list: 1. Sales (revenue), 2. Other revenue (revenue), 3. Cost of goods sold (cost, not revenue). But the question is about how revenue is organized. So the revenue items are Sales and Other revenue, with Sales being the main revenue. So the first option's order for revenue - related items (Sales first, then Other revenue) is correct, and Cost of goods sold is a separate category (cost) but in the list, the first two are revenue items in the correct order (primary then secondary revenue). The other options misplace cost items (Cost of goods sold) among revenue items or misorder the revenue items. So the correct option is the first one: 1. Sales, 2. Other revenue, 3. Cost of goods sold (but note that Cost of goods sold is a cost, not revenue, but in the context of the options, this is the one with revenue items in correct order).

Answer:

1. Sales
2. Other revenue
3. Cost of goods sold (the first option in the list of options)