Question

Gain contingencies usually are recognized in a company's income statement when:The gain is certain.The amount can be reasonably estimated.The gain is reasonably possible and the amount can be reasonable estimated.The gain is probable and the amount can be reasonably estimated.

Answer 1

Answer: the correct answer is the gain is certain.

Explanation: A gain contingency is an uncertain situation that will be resolved in the future, possibly resulting in a gain. The accounting standards do not allow the recognition of a gain contingency prior to settlement of the underlying event.