What is the major distinction between revenues and gains? What is the major distinction between expenses and losses?
and what is the basis for distinguishing between operating and non-operating items?
The difference between revenues and gains is the relative ability to repeat the source of the income in the future. Revenues stem from normal operations and represent a steady stream of income to a firm. An example would be the money earned from the sale of a dozen doughnuts in a bakery.
Gains are one-time events resulting in positive cash flow to a firm. An example would be a doughnut store that owns a piece of land that it bought for $50,000 and sold for $65,000. The business would realize a gain of $15,000 but from a ...
The solution details the major differences between revenues and gains and between expenses and losses.