When shares of stock held as an investment are sold, the difference between the proceeds and the balance of the investment account is recorded as a(n)
A) prior period adjustment
B) operating income and losses
C) paid-in capital addition
D) gain or loss

Question

Quizplus · Accepted Answer

The difference between the proceeds and the balance of the investment account when shares of stock are sold is recognized as a gain or loss. This gain or loss is reported on the income statement as a non-operating item.

When Shares of Stock Held as an Investment Are Sold