Asked by
Germany Davis
on Oct 28, 2024
Verified
The primary difference in accounting for available-for-sale debt investments and accounting for trading debt investments is which of the following?
A) Measuring the fair value of the long-term and short-term investment portfolios on the balance sheet.
B) Determination of the acquisition cost.
C) Reporting of the unrealized holding gain or loss on investments within the financial statements.
D) Determination of the unrealized holding gain or loss.
Available-For-Sale Debt Investments
Debt securities not classified as held-to-maturity or trading securities, carried at fair value, with unrealized gains or losses reported in other comprehensive income.
Trading Debt Investments
Debt securities bought and sold with the intention of profiting from short-term price fluctuations, recorded as current assets.
Unrealized Holding Gain/Loss
Gains or losses on investments that have not yet been sold, and thus the gain or loss has not been "realized."
- Differentiate among various categories of securities such as trading, available-for-sale, and held-to-maturity, along with their implications for accounting.
- Determine and record the unrealized gains and losses in investments.
Verified Answer
TR
Learning Objectives
- Differentiate among various categories of securities such as trading, available-for-sale, and held-to-maturity, along with their implications for accounting.
- Determine and record the unrealized gains and losses in investments.