If a Stock Investment Is Sold at a Gain, the Gain

question 87

Multiple Choice

If a stock investment is sold at a gain, the gain

• A) is reported as operating revenue.
• B) is reported under a special section, "Discontinued investments," on the income statement.
• C) is reported in the Other Revenue and Gain section of the income statement.
• D) contributes to gross profit on the income statement.

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Definitions:

Total Operating Capital

Represents the total amount of capital tied up in operating assets, necessary for the day-to-day functioning of a business.

Balance Sheet

A report detailing a firm's financial state through a breakdown of its assets, liabilities, and equity from shareholders at a certain moment, offering an overview of its financial health.

Current Liabilities

Short-term financial obligations due within one year or within the company's operating cycle.

Depreciation

Depreciation represents the gradual reduction of the recorded cost of a fixed asset over its useful life, reflecting the asset's wear and tear, deterioration, or obsolescence.