Financial Accounting, 8th Edition
8th Edition
ISBN: 9780078025556
Author: Robert Libby, Patricia Libby, Daniel Short
Publisher: McGraw-Hill Education
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Question
Chapter E, Problem 4MCQ
To determine
Find the correct option, the option which explains the reporting of realized gain and losses on income statement, for trading and available-for-sale securities.
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Students have asked these similar questions
Realized gains and losses are recorded on the incomestatement for which of the following transactions in trading securities and available-for-sale securities?a. When adjusting trading securities to fair value.b. When adjusting available-for-sale securities to fair value.c. Only when recording the sale of trading securities.d. When recording the sale of either trading securities oravailable-for-sale securities
choose the correct answer:
Equity security acquired for trading should be measured at reporting date
a. cost, being the purchase price
b. cost, being the purchase price plus transaction costs
c. fair value, with change in FV taken through profit or loss.
d. fair value, with change in FV taken through other comprehensive income.
For investments in equity securities, which will result in recording income based on the
income of the investee?
Select one:
a. Held-to-maturity classification
b. Trading classification
O C. Available-for-sale classification
O d. Equity method of accounting
Chapter E Solutions
Financial Accounting, 8th Edition
Ch. E - Prob. 1QCh. E - Explain the difference in accounting methods used...Ch. E - Explain how bonds held to maturity are reported on...Ch. E - Explain the application of the cost principle to...Ch. E - Under the fair value method, when and how does the...Ch. E - Under the equity method, why does the investor...Ch. E - Prob. 7QCh. E - Prob. 8QCh. E - Prob. 9QCh. E - Company X owns 40 percent of Company Y and...
Ch. E - Prob. 2MCQCh. E - Dividends received from stock that is reported as...Ch. E - Prob. 4MCQCh. E - Prob. 5MCQCh. E - When using the equity method of accounting, when...Ch. E - Prob. 7MCQCh. E - Prob. 8MCQCh. E - Which of the following is true regarding the...Ch. E - Prob. 10MCQCh. E - Matching Measurement and Reporting Methods Match...Ch. E - Prob. 2MECh. E - Prob. 3MECh. E - Prob. 4MECh. E - Prob. 5MECh. E - Prob. 6MECh. E - Prob. 7MECh. E - Prob. 8MECh. E - Prob. 9MECh. E - Prob. 10MECh. E - Prob. 11MECh. E - Prob. 1ECh. E - Prob. 2ECh. E - Prob. 3ECh. E - Prob. 4ECh. E - Prob. 5ECh. E - Prob. 6ECh. E - Prob. 7ECh. E - Prob. 8ECh. E - Prob. 9ECh. E - Prob. 10ECh. E - Prob. 11ECh. E - Prob. 1PCh. E - Prob. 2PCh. E - Prob. 3PCh. E - Prob. 4PCh. E - Prob. 5PCh. E - Prob. 6PCh. E - Prob. 7PCh. E - Recording Investments for Significant Influence LO...Ch. E - Prob. 9PCh. E - Prob. 10PCh. E - Prob. 11PCh. E - Prob. 1APCh. E - Prob. 2APCh. E - Prob. 3APCh. E - Prob. 4APCh. E - Prob. 5APCh. E - Prob. 6APCh. E - Prob. 1CPCh. E - Prob. 2CPCh. E - Prob. 3CPCh. E - Prob. 4CPCh. E - Prob. 5CPCh. E - Prob. 6CPCh. E - Prob. 1CC
Knowledge Booster
Similar questions
- Answer these three questions.arrow_forwardUnrealized 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.arrow_forwardWhen comparing fi nancial statements prepared under IFRS with those prepared underUS GAAP, analysts may need to make adjustments related to:A . realized losses.B . unrealized gains and losses for trading securities.C . unrealized gains and losses for available-for-sale securities.arrow_forward
- The balance sheet account that is usually reported at its fair market value is: a. Short-term marketable securities b. Accounts receivable c. Current liabilities d. Inventoryarrow_forwardMarketable securities are accounted for at their current fair value using mark-to-market accounting. Discuss why mark-to-market accounting is superior to accounting for mar- ketable securities at their historical cost. Should mark-to-market accounting be adopted to account for all assets on the balance sheet? Why or why not?arrow_forwardFor 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.arrow_forward
- The account Unrealized Gain (Loss) on Trading Investments should be included on thearrow_forwardGAAP requires investments in bonds classified as trading securities to be reported at their: A. fair value. B. net realizable value. C. maturity value. D. historical cost.arrow_forwardDescribe how short-term investments are reported in the balance sheet and account fortransactions involving marketable securities.arrow_forward
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