Mega Company Receives Net Proceeds of $73,000 on the Sale

question 48

Multiple Choice

Mega Company receives net proceeds of $73,000 on the sale of stock investments that cost $79,000. This transaction will result in reporting in the income statement a

• A) loss of $6,000 under "Other expenses and losses."
• B) loss of $6,000 under "Operating expenses."
• C) gain of $6,000 under "Other revenues and gains."
• D) gain of $6,000 under "Operating revenues."

---

Definitions:

Social Exchange Theory

A theoretical perspective, based on the principle of reinforcement, that assumes that people will likely choose actions that maximize rewards and minimize costs.

Exchange Network

A social structure that consists of individuals or entities sharing resources and services through a system of transactions.

Group Polarization

In group decision making, the tendency for group members to shift their opinions toward a position that is similar to but more extreme than the positions they held prior to group discussion; both the risky shift and the cautious shift are instances of group polarization.

Risky Shift

In group decision making, the tendency for decisions made in groups after discussion to be riskier than decisions made by individual members prior to discussion.