Gain contingencies usually are recognized in a company's income statement when:
A) Realized.
B) The amount can be reasonably estimated.
C) The gain is reasonably possible and the amount can be reasonable estimated.
D) The gain is probable and the amount can be reasonably estimated.

Question

Quizplus · Accepted Answer

Gain contingencies are recognized in the income statement when they are realized, not merely when they are probable or can be estimated. This is because recognizing gains before they are realized could potentially mislead users of financial statements by overstating a company's financial position.

Gain Contingencies Usually Are Recognized in a Company's Income Statement