25. Help me selecting the right answer. Thank you Trading debt investments includeinvestments in debt securities that the investor intends to hold until they maturedebt securities that the investor plans to sell in the very near futuredebt securities that the investor expects to hold longer than one year or debt securities that are not readily marketableinvestments in debt securities that are not readily marketable and that the investor intends to hold until they mature

The correct answer is: (B) debt securities that the investor plans to sell in the very near future.…

Answered: Trading debt investments include

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 2MCQ

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Held-to-maturity investments applies only to debt securities because ________. A. the classification is dependent on the investor's intention to hold the investment until maturity, and equity securities do not mature on a specific date B. these are long-term investments C. these securities earn periodic interest D. the classification is dependent on the investor's level of influence over the investee company
Debt securities sold to investors that must be repaid at a particular date in the future
An investment in debt securities which the investor intends to hold until they mature is classified as A. Trading debt investments B. Significant influence equity investments C. Available-for-sale (AFS) debt investments D. No significant influence equity investments E. None of the above
Which of the following statements is correct in regard to trading bond investment? a. Trading bond investments are held with the intention of selling them in a short period of time b. Unralized gains and losses are reported as part of income c. both are correct d. both are incorrect
Long-term investments cannot include: Multiple Choice Equity securities giving an investor significant influence over an investee. Available-for-sale debt securities. Equity securities giving an investor insignificant influence over an investee. Securities with maturity dates within three months. Held-to-maturity debt securities.
Available-for-sale securities are securities that management expects to sell in the future, but not in the near term. True False
What is Correct option
Debt securities are instruments that provide the holder a promise to pay the instrument's face value (or par value) at the maturity date and interest payment at specific intervals. Question 2 options: True False
statements are true of long-term investments? They can include bonds and stocks not intended to be sold in the near future.
According to AC Topic 320, 'Investments - Debt and Equity Securities', all of the following changes in circumstances may cause an entity to change its intent to hold a certain security to maturity without calling into question its intent to hold other debt securities to maturity in the future, EXCEPT for: O a. Evidence of a significant deterioration in the issuer's creditworthiness O b. Changes in market interest rates and related changes in the security's prepayment risk Oc. A change in tax law that eliminates or reduces the tax-exempt status of interest on the debt security O d. A major business combination or major disposition that necessitates the sale or transfer of held-to-maturity securities to maintain the entity's existing interest rate risk position or credit risk policy
The realized gain (loss) on sale of debt investments with an objective of collecting contractual cash flows and to sell when circumstances warrants is the difference of the net selling price and the fair value of the bonds. Group of answer choices False True
The fair value option allows a company to report most financial instruments at fair value at each reporting date. record the unrealized gains and losses related to changes in the fair value of available-for-sale debt securities in net income. account for held-to-maturity securities at amortized cost. all of these choices are true of the fair value option.

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