Asked by Corien Frazier on Jul 14, 2024
Verified
Held-to-maturity securities
A) are reported at fair value on the balance sheet date
B) include both stocks and bonds
C) are primarily purchased to earn interest revenue
D) all are correct
Held-to-Maturity Securities
Investment securities that a company has the intent and ability to hold until a specified maturity date.
Interest Revenue
Income earned from lending investments or depositing funds in interest-bearing accounts, often reported on the income statement.
- Comprehend the categories of investments including trading, available-for-sale, and held-to-maturity.
Verified Answer
GZ
Geraldina ZapataJul 20, 2024
Final Answer :
C
Explanation :
Held-to-maturity securities are debt securities that are held by an investor with the intention of holding them until maturity. They are reported on the balance sheet at amortized cost, not at fair value. These securities are primarily purchased to earn interest revenue, rather than for trading or speculative purposes. Stocks are not considered held-to-maturity securities, only bonds and other debt securities. Therefore, only choice C is correct.
Learning Objectives
- Comprehend the categories of investments including trading, available-for-sale, and held-to-maturity.
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