What is typically included in book income but not in taxable income?

The correct choice focuses on life insurance proceeds, which are generally included in book income but are excluded from taxable income. When a business receives a life insurance payout due to the death of an insured employee or owner, that amount is not subject to income tax. This treatment is grounded in tax regulations, which categorize life insurance proceeds as tax-exempt income when paid to beneficiaries.

While other options might also relate to income recognition, they differ in their tax treatment. Cash received from sales and net income from operations are included in both book and taxable income, as they reflect operational performance. Tax-exempt interest, while not taxable, is commonly excluded from taxable income from the start rather than being included in book income, making it a different case.

Understanding these distinctions is crucial for accurately reporting income and managing taxable liabilities compared to what is reflected in financial statements.