Which Statement Is True Concerning Gains and Losses

question 145

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 are correct.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance.

Book Value

The net value of an asset or company calculated as total assets minus intangible assets and liabilities.

Variable Costs

Expenses that change in proportion to the production or sales quantities.

Operating Loss

A situation where a company's operating expenses exceed its gross profits or revenues, indicating a loss in its core business activities.