Asked by Samuel Flores on Jul 15, 2024
Verified
The account Unrealized Gain on Trading Investments should be included on the
A) income statement as other revenue (expense)
B) balance sheet as an adjustment to the asset account
C) balance sheet as an adjustment to stockholders' equity
D) statement of stockholder's equity
Unrealized Gain
An increase in the value of an asset that has not been sold, hence the profit is not yet realized.
Trading Investments
Securities purchased and held primarily for selling them in the near term to generate income on short-term price differences.
- Gain insights into the handling and disclosure of investments within financial reports.
Verified Answer
MF
Maria FloresJul 19, 2024
Final Answer :
A
Explanation :
Unrealized gains on trading investments are included in the income statement as they represent gains that have been earned but not yet realized through the sale of the investments. These gains affect the net income for the period in which they occur.
Learning Objectives
- Gain insights into the handling and disclosure of investments within financial reports.
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