diff --git a/src/rpc/blockchain.cpp b/src/rpc/blockchain.cpp
index 6178a1c7a..10eb7f13a 100644
--- a/src/rpc/blockchain.cpp
+++ b/src/rpc/blockchain.cpp
@@ -944,9 +944,10 @@ UniValue gettxout(const JSONRPCRequest& request)
             "gettxout \"txid\" n ( include_mempool )\n"
             "\nReturns details about an unspent transaction output.\n"
             "\nArguments:\n"
-            "1. \"txid\"       (string, required) The transaction id\n"
-            "2. n              (numeric, required) vout number\n"
-            "3. include_mempool  (boolean, optional) Whether to include the mempool\n"
+            "1. \"txid\"             (string, required) The transaction id\n"
+            "2. \"n\"                (numeric, required) vout number\n"
+            "3. \"include_mempool\"  (boolean, optional) Whether to include the mempool. Default: true."
+            "     Note that an unspent output that is spent in the mempool won't appear.\n"
             "\nResult:\n"
             "{\n"
             "  \"bestblock\" : \"hash\",    (string) the block hash\n"
diff --git a/test/functional/wallet.py b/test/functional/wallet.py
index 3e3e8fcdd..a37c457bc 100755
--- a/test/functional/wallet.py
+++ b/test/functional/wallet.py
@@ -56,6 +56,15 @@ class WalletTest(BitcoinTestFramework):
         assert_equal(len(self.nodes[1].listunspent()), 1)
         assert_equal(len(self.nodes[2].listunspent()), 0)
 
+        self.log.info("test gettxout")
+        confirmed_txid, confirmed_index = utxos[0]["txid"], utxos[0]["vout"]
+        # First, outputs that are unspent both in the chain and in the
+        # mempool should appear with or without include_mempool
+        txout = self.nodes[0].gettxout(txid=confirmed_txid, n=confirmed_index, include_mempool=False)
+        assert_equal(txout['value'], 50)
+        txout = self.nodes[0].gettxout(txid=confirmed_txid, n=confirmed_index, include_mempool=True)
+        assert_equal(txout['value'], 50)
+        
         # Send 21 BTC from 0 to 2 using sendtoaddress call.
         # Locked memory should use at least 32 bytes to sign each transaction
         self.log.info("test getmemoryinfo")
@@ -65,10 +74,9 @@ class WalletTest(BitcoinTestFramework):
         memory_after = self.nodes[0].getmemoryinfo()
         assert(memory_before['locked']['used'] + 64 <= memory_after['locked']['used'])
 
-        self.log.info("test gettxout")
+        self.log.info("test gettxout (second part)")
         # utxo spent in mempool should be visible if you exclude mempool
         # but invisible if you include mempool
-        confirmed_txid, confirmed_index = utxos[0]["txid"], utxos[0]["vout"]
         txout = self.nodes[0].gettxout(confirmed_txid, confirmed_index, False)
         assert_equal(txout['value'], 50)
         txout = self.nodes[0].gettxout(confirmed_txid, confirmed_index, True)