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

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

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 3Q

See similar textbooks

Related questions

Q: Which of the following is true regarding accounting for debt investments? A) The classification of…

A: D) All of the above. B) The fair value option must be elected for all such…

Q: Where on the financial statements is an unrealized holding gain or loss on trading investments…

Q: p of answer choices: a) Fair market value b) Equity value c) Discounted present value d) Cost

A: a) Fair market value - Fair market value is the price the invest would fetch on selling in the open…

Q: When comparing fi nancial statements prepared under IFRS with those prepared underUS GAAP, analysts…

A: IFRS and US GAAP follows similar accounting policies when it comes to realized losses and unrealized…

Q: Which of the following is an example of long term instruments? (select all that apply) a. Asset…

A: Long Term Instruments are the instruments which are issues for the longer time period, generally…

Q: Interest expense on the income statement: A) B) C) D) is net of any bond premium amortization will…

A: Interest expense on the income statement:Answer: (A) is net of any bond premium amortization

Q: Comprehensive income includes the following items, except: Select one: a. Deferred gains or…

A: Definition: Comprehensive income: The change that occurs in the equity of a company from other…

Q: Which of the following is NOT a component of Accumulated Other Comprehensive Income? A. Gains or…

A: Other comprehensive income (OCI) includes any unrealized gains or losses from sources of funds from…

Q: 16. When the market value of a company's available-for-sale investments is lower than its cost, the…

A: When the market value of a company's available-for-sale investments is lower than its cost, the…

Q: GAAP requires investments in bonds classified as trading securities to be reported at their:

Q: Explain the following types of debt and equity investments with no significant influence: (a)…

A: we will only answer the first three subparts, for the remaining subparts kindlr resubmit the…

Q: Charges in the fair value of the effective portion of a hedging financial instrument are recognized…

A: Fair value hedge - It is related to a fixed value item and the fair value changes to hedging…

Q: Which of the following is stated correctly? a. Current liabilities follow non-current liabilities…

A: Definition: Liability: Liability is an agreement made by a company to pay a certain amount for the…

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: Indicate how unrealized holding gains and losses should be reported for investments classified as…

A: Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from…

Q: other comprehensive income

A: Other comprehensive income includes gains or losses that are not included in profit and loss…

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: Held-to-maturity investments applies only to debt securities because ________. A. the…

A: Held to maturity investment applies only to debt securities because the investor tends to hold the…

Q: Fair value is used to value which of the following balance sheet accounts? a. Prepaid expenses;…

A: The value of financial instruments, such as debt securities, that are traded or sold is sometimes…

Q: . Which of the following statements regarding available-for-sale equity investments is true? a.…

A: As the name suggests the available-for-sale equity or securities are the equities that are held to…

Q: Which of the following is not a long term source of capital? a. Preferred stock b. Common stock c.…

A: Sources of capital can be long-term and short-term. Those sources which have a repayment period of…

Q: Where are debt investments classed as trading securities, available-for-sale securities, and…

A: Secured debt obligations: The borrowed money must be returned and has a specified amount, maturity…

Q: Reported earnings become overstated as a result of failure to record which of the following: a. the…

A: THIS is one of the most common in financial statement. there may be a case of manipulation of…

Q: On a balance sheet, what valuation must be reported for short-term debt investments in trading…

A: Short term debt investments are those debt funds or mutual funds that are obtained for a short…

Q: 14) Which of the following is the least liquid current asset? A) Accruals B) Accounts receivable C)…

A: As a result of the fact that inventory consists of goods that are held with the intention of selling…

Q: Which of the following would NOT be included in the journal entry to show the conversion of bonds…

A: Journal entry: A journal entry is a documentation of a business's financial activities kept in its…

Q: Merchandise sold by Lang Company to its customers last year amounted to $13,720,000; sales returns…

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

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: Common Stock investments using the fair value method are: A. reported at fair value on the balance…

A: Common Stock investments using the fair value method are reported at fair value as on the balance…

Q: Indicate how unrealized holding gains and losses shouldbe reported for debt investments classified…

A: Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from…

Q: Which items are NOT other comprehensive income?

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

Q: Changes in the fair value of the effective portion of a hedging financial instrument are recognized…

A: Financial instruments includes the shares, bonds, futures, stocks, options or any assets which can…

Q: Realized gains and losses are recorded on the incomestatement for which of the following…

Question

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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

choose the correct answer: 1. Trading securities are held with the intention of being sold in a short period of time 2. Trading securities unrealized holding gains or losses are reported in profit or loss. a. Only the first statement is correct. b. Only the second statement is correct. c. Both statements are correct. d. Both statements are incorrect.
An unrealized holding gain or loss on a trading debt investment is the difference between the investments Select one: a. fair value and original cost. b. fair value and amortized cost. c. face value and amortized cost. d. face value and original cost.
1. Trading bond investments are reported at A. Face amount B. Amortized cost C. Maturity value D. Fair value 2. Accrued interest of bonds that are purchased between interest dates A. Is recorded as a loss on the sale of the bonds B. Increases the amount a buyer must pay C. Is ignored by both the seller and the buyer D. Decreases the amount a buyer must pay
Explain the difference(s) between investments in equity securities classified as current assets versus those classified as long-term (noncurrent) assets.
The account Unrealized Gain (Loss) on Trading Investments should be included on the
(i). Debt investments not plan to sell reported at a. amortized cost. b. fair value. c. the lower of amortized cost of fair value. d. net realizable value. (ii). which of the following caa be reported at fair value? a. Debt investments. b. Equity investments. c. Both debt and equity investments: d None of these answers' choices are correct.
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
3. Which of the following categories of investments are reported at their fair values on the balance sheet and have unrealized holding gains and losses included as a separate component of stockholders' equity? a. held-to-maturity debt securitiesb. marketable securitiesc. available-for-sale securitiesd. trading securities
For which of the following securities will unrealized holding gains or losses be recorded as other comprehensive income? Enter 1, 2, 3, or 4 that represents the correct answer. Debt investments, trading. Debt investments, held-to-maturity. Equity investments, trading. Equity investments, available-for-sale.
When the market value of a companys available-for-sale securities is lower than its cost, the difference should be: a. shown as a liability. b. shown as a valuation allowance added to the historical cost of the investments. c. shown as a valuation allowance subtracted from the historical cost of the investments. d. No entry is made, the securities are shown at historical cost.
Which of the following would trigger a subtraction in the indirect operating section? A. gain on sale of investments B. depreciation expense C. decrease in accounts receivable D. decrease in bonds payable
When the market value of a company’s portfolio of available-for-sale securities is lower than its cost，the difference should be: a. accounted for as a valuation allowance deducted from the asset to which it relates b. accounted for as an addition in the shareholders’ equity section of the balance sheet c. accounted for as a liability d. disclosed and described in a note to the financial statements but not accounted for.