Explanation

Under accounting standards, both realized and unrealized foreign currency transaction gains should be reported on the income statement.

Key points:

• Realized gains occur when foreign currency transactions are settled
• Unrealized gains occur when foreign currency monetary items are revalued at period-end exchange rates
• Both types of gains/losses are recognized in the income statement in the period they occur
• This treatment applies to foreign currency transactions, not translation adjustments from foreign operations

Option A is correct because both realized and unrealized transaction gains are reported on the income statement.