Discuss the arguments for each position. Some individuals maintain that the only proper accounting treatment for all marketable securities is current value, while others maintain that this treatment might allow companies to manage earnings.

Q: In order to arrive at an intrinsic value for the stock of a company when using the Corporate…

A: Corporate Valuation Model:- This model is also known as the cash flow method, it helps in suggesting…

Q: Why do you suppose accounting regulations requirecompanies to report paper losses or gains from…

A: This Statement establishes standards of accounting for exchange-traded futures contracts (other than…

Q: f securities markets are rational and efficient in that they fully and correctly include all…

A: The concept of the Efficient Market Hypothesis (EMH) is rooted in the idea that financial markets…

Q: False

A: 1) Primary markets are markets are markets where companies make new issue of shares to the general…

Q: here are many issues swirling around the accounting for preferred stock. It is actually treated…

A: A financial statement formally documents a company's, an organization's, or a person's financial…

Q: How would you describe a change that a company makes from the equity method to the fair-value method…

A: Definition:   Equity method: Equity method is the method used for accounting equity investments…

Q: All of the following statements are true regarding available-for-sale securities except   a.changes…

A: The financial instruments that are tradable and can be used to raise capital in private and public…

Q: Do you think that the so-called equity theories of accounting are really theories in the scientific…

A: Yes. equity theories of accounting are really theories in the scientific sense.  the real owners are…

Q: There will likely be a difference between your calculation of the Company’s intrinsic value and its…

A: Intrinsic value is the true or inherent value of a company. It is a fundamental value which is…

Q: Firms invest in marketable securities for a variety of reasons. One of the most common reasons is to…

A: Investment assets are those assets which are purchased in order to make short term or long term…

Q: To what extent do you feel the company’s dividend policies support or hinder their strategies? For…

A: The main aim of any organization should be to increase shareholder value, however for any growth…

Q: What allows financial institutions to generate a profit? What are the conditions under which their…

A: THE INTRODUCTION: The marketplaces where financial assets and instruments are traded and the sites…

Q: why are equities regarded as riskier than debentures for investor? a) because they are paid first…

A: The question is asking why equities are considered riskier than debentures from an investor's…

Q: Which of the following is a false statement about applying the equity method? O A. One of the…

A: In accounting, the equity method is used to account for investments when one company holds…

Q: What is the value of common-sizing analysis? Why would a company do such an analysis on another…

A: Lets understand the basics. There are two type of analysis is generally made by the entities which…

Q: Distinguish between the accounting treatment for marketable versus nonmarketable equity securities.

A:

Q: If a company uses a non-GAAP fi nancial measure in an SEC fi ling, then the companymust:A . give…

A: Solution:- If a company uses a non-GAAP financial measure in an SEC filing, then the company must…

Q: Which one of the following has the potential to allow for the greatest amount of off-balance-sheet…

A: Off-balance sheet financing (OBSF) is an accounting technique in which a company records certain…

Q: Both individuals and companies monitor the stock market. Explain how their reasons for doing so…

A: individual monitor their stock price by the following steps 1) keep updated about the latest news…

Q: When the market value of a company’s portfolio of available-for-sale securities is lower than its…

A: Valuation allowance account - Contra asset to record "temporary" market changes in FV for HFT/AFS…

Q: Which of the following is TRUE about the strong form of market efficiency?     Insider information…

A: Market Efficiency Hypothesis (MEH) is an assumption which states that prices of the securities/stock…

Q: Why is the valuation method of valuing dividends (based on the present value of dividends) a more…

A: There are different methods of valuing a stock. One way is to determine the present value of all…

Q: Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets…

A: A)Purchasing fixed assets using cash decreases the current ratio. Purchasing fixed asset using cash…

Q: Question 2) Issuing marketable securities is the primary way businesses finance their orperations.…

A: Marketable securities can be defined as those short term highly liquid securities which can be…

Q: What is a difference in motivations for accounting methods between a favorable profit picture and a…

A: Accounting methods refers to several available accounting practices from which accountant can select…

Q: Do you think companies have more incentive to report securitization as a sale or secured borrowing…

A: Window Dressing: It refers to the more formal steps that have been done to enhance the financial…

Q: For the example below, list and describe the input(s) (observable or unobservable) and valuation…

A: Level 1 - Quoted Prices in Active Markets: It includes inputs that are based on quoted prices in the…

Q: Which of the folowwing statements about a company's stock valuation is incorrect? Select one: a.…

A: The company's stock valuation is the function of amount of cashflow and timing of the cashflow

Q: Analyze the truth of this statement: Under the cost method of accounting for investments, a…

A: Cost Method of Accounting for Investments: When it comes to recognizing particular investments in a…

Q: The assumption that a business enterprise will not be sold or liquidated in the foreseeable future…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Why are most decision makers particularly concerned about the amount of current liabilities reported…

A: A current liability is a debt that the company intends to pay off right away using resources that…

Q: 2. Which of the following is not included in comprehensive income? a. gains on reissuance of…

A: Comprehensive income: It includes all the changes in company's equity during a specified period…

Q: Why are unrealized gains and losses on trading securities reported in the incomestatement?

A: Unrealized gains and losses: Trading securities are reported at their fair values. Unrealized gains…

Q: Which of the following is not an impairment indicator for investment securities? Group of answer…

A: The objective of the question is to identify which among the given options is not considered an…

Q: Which of the following is not a factor in producing earnings forecasts?

A: Factors that are typically considered when producing earnings forecasts include the separation of…

Q: (1) What factors might lead a company to gainadditional funds through debt financing rather…

A: Financial Activities: Financial exercises are exercises that organizations embrace to assist with…

Q: The weak form of the efficient market hypothesis implies that: CHOOSE ONE   A. Investors can…

A: As per the EMH, the future prices of shares cannot be predicted based on historical data or any…

Q: Substantial doubt exists regarding a client's ability to continue. The client must present its plans…

A: Solution: Substantial doubt exists regarding a client's ability to continue. The client must present…

Q: Explain why a company might issue convertible securities instead of straightforward debt or equity.…

A: Convertible security is an instrument , usually a bond or a preferred stock, that can be converted…

Q: Financial risk refers to the: Multiple Choice   possibility that interest rates will increase.…

A: Financial risk refers to the inability of the firms to meet its debt obligations. In the case of…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.