Which Statement Is True Concerning Gains and Losses

question 225

Multiple Choice

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 choices.

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Definitions:

Post Hoc

is a term derived from the phrase "post hoc ergo propter hoc," meaning "after this, therefore because of this," commonly used to describe a logical fallacy where one event is incorrectly assumed to cause another just because it occurred earlier.

Economic Reasoning

Refers to the process of making decisions based on comparing costs and benefits.

Marginal Costs

The added expense to produce one more item; it can decrease or increase depending on production size and efficiency.

Marginal Benefits

The boost in satisfaction or usefulness derived from the consumption of an additional unit of a good or service.