Question

If a common stock investment is sold at a gain, the gain Select one: a. is reported in the Other Revenues and Gains section of the income statement. b. contributes to gross profit within the income statement. c. is reported as operating revenue. d. is reported under a special section titled "Discontinued Investments" on the income statement.

Answer 1

The correct answer is letter "A": is reported in the Other Revenues and Gains section of the income statement.

Step-by-step explanation:

The Other Revenues and Gains section of the Income Statement all those income a firm earned given a period as a result of transactions that do not belong to the company's business. They are also called non-operating revenue. A typical example of a non-operating revenue is the interest earned for selling on credit.

Therefore, the proceeds from a common stock investment sold at a gain will be recorded in the Other Revenues and Gains section of the Income Statement.