For interim financial reporting, an extraordinary gain occurring in the second quarter should be
A) recognized ratably over the last three quarters.
B) recognized ratably over all four quarters with the first quarter being restated.
C) recognized in the second quarter.
D) disclosed by note only in the second quarter.

Question

Quizplus · Accepted Answer

Extraordinary gains and losses are recognized in the period in which they occur, regardless of whether it is an interim or annual financial report. Therefore, the extraordinary gain should be recognized in the second quarter.

For Interim Financial Reporting, an Extraordinary Gain Occurring in the Second