Two terms used in financial accounting are gain and revenue. Which of the following statements is correct?
A) Revenues relate to the main business of the company, while gains are from events that are not a main regular part of the business.
B) The two terms mean the same thing.
C) A company's revenues are always much larger than the gains it has.
D) A company that reports revenues will never report gains.

Question

Quizplus · Accepted Answer

Revenues are generated from the main activities of the company, such as the sale of goods or services, while gains are generated from events that are not a regular part of the business, such as the sale of property or equipment. Therefore, Option A is the correct statement. Option B is incorrect as the two terms have different meanings. Option C is not necessarily true as the size of revenues and gains can vary greatly depending on the company and its activities. Option D is incorrect as a company can report both revenues and gains.

Two Terms Used in Financial Accounting Are Gain and Revenue