In the case of an investment in equity securities where the investor does not have significant influence and the investment is carried at fair value, a dividend from the investee is:     Income to the investor in the period of declaration.     A reduction of the carrying amount of the investment.     A direct increase to retained earnings of the investor to offset the direct decrease to retained earnings of the investee.     An expense to the investor in the period of declaration.

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

A: Equity means ownership or stake in a company through holding of shares of that company. It is also…

Q: One of the primary reasons for investing in equity securities includes a. Receiving dividend…

A: Investments refers to the process of using the currently held excess cash to earn profitable returns…

Q: An investor has no specific right or guarantee of a return on their investment investing in…

A: When an investor purchases securities in stock market such as stocks or bonds, there is no specific…

Q: When an investment in an available-for-sale debt security is transferred to trading because the…

A: Available for sale debt securities are those investment which is held by the entity not to hold till…

Q: Investments in equity securities for which the investor has insignificant influence over the…

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: An investor pays taxes on unrealized gains on equity investments   options:   True   False

A: An unrealized gain could be a potential profit that exists on paper, resulting from an investment.…

Q: For fi nancial assets classifi ed as trading securities, how are unrealized gains and lossesrefl…

A: Trading securities are debt or equity assets that management expects to aggressively sell for gain…

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: Dividend revenue is recognized for trading securities and available for sale securities even if held…

A: Solution Concept Dividend is recognized in income statement for trading securities if they are held…

Q: Accounting type Question: Bonus shares cannot be issued out of: A. Profit and Loss a/c B. Capital…

A: Bonus shares are issued by cashing in on the free reserves of the company. The assets of a company…

Q: Which statement is not true?

A: In the above question, there are four statements; we must identify which of the four statements is…

Q: Which of the following statements related to securities is not true: O Unrealized gains and losses…

A: The statement that is not true related to securities is given below

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 classification of Equity investments for which the investor does not have significant…

A: When a equity investment is made and if such investment does not result in significant influence,…

Q: Stock returns are unlimited while returns on debt investments are limited to interest payments and…

A: Investment in Equity vs Investment in debt Investment in equity provides a part of ownership in the…

Q: mature is classified as     A. Trading debt investments     B. Significant influence equity…

A: option C is correct  Available-for-sale (AFS) debt investments

Q: In what way does paying off a liability impact stockholder's equity? negatively positively no…

A: The financial statements of the business are classified as balance sheet, income statement and cash…

Q: Why is there a cost for retained earnings? Group of answer choices Earnings can be reinvested or…

A: Retained earnings is the amount of net income which remains after the distribution of dividends.

Q: Under IFRS, the unrealized loss on trading investments should be reported: a. as part of other…

A: Option a: This option is incorrect because unrealized loss on trading investments is a part of other…

Q: How is the adjustment to fair value recorded differently for a cash flow hedge versus a fair value…

A: Hedge Hedge is simply called financial instrument which can be reduce the mitigation of risk which…

Q: The Share Premium-Ordinary account represents the amount of legal capital. O is reported as part of…

A: Shareholder's EquityThe amount available to the shareholders in the company is called shareholder's…

Q: Which items are NOT other comprehensive income?

A: Comprehensive income can be classified into: Net income Other comprehensive income.   Net income…

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.