Which of the following statements related to securities is not true: O Unrealized gains and losses related to available-for-sale securities are reported in earnings. O Held-to-maturity securities are recorded at amortized cost. O Equity securities without a readily determinable fair value are recorded at cost with impairment losses reported in earnings. O Unrealized gains and losses related to trading securities are reported in earnings.

Which of the following statements related to securities is not true: O Unrealized gains and losses related to available-for-sale securities are reported in earnings. O Held-to-maturity securities are recorded at amortized cost. O Equity securities without a readily determinable fair value are recorded at cost with impairment losses reported in earnings. O Unrealized gains and losses related to trading securities are reported in earnings.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Investments in debt securities are classified for accounting purposes as: A. Financial asset at amortized cost (AC), fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVPL) B. Financial asset at amortized cost (AC) or fair value through other comprehensive income (FVOCI) only C. Trading, Available-for-Sale (AFS) or Held-to-Maturity (HTM) D. Available-for-Sale (AFS) or Held-to-Maturity (HTM) only
Investments in equity securities for which the investor has insignificant influence over the investee are classified for reporting purposes under the fair value method in one of two categories. What are these two categories?
In an equity swap where a liability is settled through the issuance of equity securities A.no gain or loss is recognized B.gains are recognized as Share Premium, losses are expensed. C.gain or loss is recognized as the difference between the measurement amount of the equity securities issued and the carrying amount of the liability derecognized D.any apparent gain or loss is recognized in equity as an addition to share premium
Merchandise sold by Lang Company to its customers last year amounted to $13,720,000; sales returns and allowances were $370,000, sales discounts were $175,000, and freight-out was $140,000. Net sales last year for Lang Company were a. b. C. d. Select one: a. $13,350,000. b. $13,720,000. C. $13,175,000. d. $13,035,000.
A market where investors trade previously issued securities without the issuing companies involvement O Primary market O Secondary market O Stock market O Financial security market
True or false question
2. Which of the following is not included in comprehensive income? a. gains on reissuance of treasury shares b. translation differences related to foreign operations c. fair value gains or losses on FVOCI securities. d. fair value gains or losses on FVPL securities.
Why are unrealized gains and losses on trading securities reported in the incomestatement?
Indicate how unrealized holding gains and losses shouldbe reported for debt investments classified as trading,available-for-sale, and held-to-maturity.
Unrealized gains/losses of trading securities and available-for-sale securities investment are reported on the Balance sheet as part of Investment. Income statement and accumulated other comprehensive Income respectively. Income statement. Accumulated other comprehensive Income.
All equity securities and investments in debt securities that are intended to be sold in the near term are classified as held-to-maturity securities. trading securities. available-for-sale securities. none of these choices. 2. Any change in the fair value of trading securities is reported on the income statement as part of net income. reported as part of other comprehensive income in the shareholders' equity section of the balance sheet. ignored; only the amortized cost is reflected in the financial statements. reported as a cash outflow in the investing activities section of the statement of cash flows. 3. A minority active investment with significant influence occurs when the investor owns between 10% and 20% of the voting common stock of the investee. over 50% of the voting common stock of the investee. between 20% and 50% of the voting common stock of the investee. over 50% of the preferred stock of the investee.
Which items are NOT other comprehensive income? 1. Unrealized gain/loss on available-for-sale debt securities 2. Unrealized gain/loss on trading debt securities 3. Foreign currency translation adjustments 4. Unrealized gain/loss on derivatives designated as a fair value hedge 5. Unrealized gain/loss on pension obligation. 6. Unrealized gain/loss on equity securities O 2, 4, 6 O 1, 2, 3, 4 O 1, 2, 6 O 3, 4, 5