Which statement is true concerning gains and losses?
A)Gains and losses are reported on the balance sheet in the Assets and Liabilities sections,respectively.
B)Gains and losses are special types of revenues and liabilities that are reported on the income statement.
C)The amounts of gains and losses are included in the calculation of the current ratio,in the numerator and denominator,respectively.
D)None of these are correct.

Question

Quizplus · Accepted Answer

Gains and losses are not reported on the balance sheet nor directly affect the calculation of the current ratio. They are reported on the income statement but are not classified as revenues and liabilities. They represent increases or decreases in equity resulting from transactions that are incidental or peripheral to the main activities of the business.

Which Statement Is True Concerning Gains and Losses