Asked by Ambriel Andrzejewski on Jun 09, 2024
Verified
Which of the following regarding trading securities is correct?
A) Trading securities are reported at cost on the balance sheet date, and unrealized holding gains and losses are included in income of the current period.
B) Trading securities are reported at fair value on the balance sheet date, and unrealized holding gains and losses are included in income of the current period.
C) Trading securities are reported at fair value on the balance sheet date, but unrealized holding gains and losses are not included in income of the current period.
D) Trading securities are reported at cost on the balance sheet date, but unrealized holding gains and losses are not included in income of the current period.
Trading Securities
Financial instruments that are purchased by a company not for long-term investment but rather with the intention to trade in the short term for profit.
Unrealized Holding
Gains or losses on investments that a company has not sold yet and hence are not recorded in the financial statements.
Fair Value
The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
- Absorb the knowledge of assorted investment categories (trading, available-for-sale, held-to-maturity) and grasp their respective procedures in accounting.
- Examine the impact that unrealized holding gains and losses have on net income and equity, according to the classification of the investment.
Verified Answer
Learning Objectives
- Absorb the knowledge of assorted investment categories (trading, available-for-sale, held-to-maturity) and grasp their respective procedures in accounting.
- Examine the impact that unrealized holding gains and losses have on net income and equity, according to the classification of the investment.
Related questions
Which of the Following Regarding Available-For-Sale Securities Is Correct ...
On January 6, 2010, Miller Company Acquired 4, 000 Shares ...
Each of the Three Categories of Investments in Debt and ...
The Generally Accepted Accounting Principles for Trading Securities Include All ...
Which of the Following Securities Are Reported at Their Amortized ...