A realized gain occurs when the:

Question

Quizplus · Accepted Answer

A realized gain occurs when the sales price is greater than the carrying amount of the investment. This means that the investor has sold the investment for a profit, resulting in a gain. Conversely, a realized loss would occur if the sales price is less than the carrying amount of the investment. The fair value of the investment versus its cost may be relevant in determining the carrying amount, but the critical factor for realizing a gain is the sales price exceeding the carrying amount. Choice C may be true, but it does not necessarily indicate a realized gain unless the investor has sold the investment at a price greater than the cost. Choice D reflects an unrealized loss, where the current value is less than the cost, but does not address the question of realized gain or loss.

A Realized Gain Occurs When The