All of the Following Statements Regarding Accounting for Noninfluential Securities

question 117

Multiple Choice

All of the following statements regarding accounting for noninfluential securities under U.S.GAAP and IFRS are true except:

• A)Trading securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income.
• B)Trading securities are accounted for using fair values with unrealized gains and losses reported in net income.
• C)Available-for-sale securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income.
• D)Held-to-maturity securities are accounted for using amortized cost.
• E)Both systems examine held-to-maturity securities for impairment.

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Definitions:

Freak Airplane Accident

An unusual and unexpected airplane incident resulting in damage or injury.

Contract Frustration

A legal concept that occurs when unforeseen circumstances prevent the fulfillment of a contract, thus releasing the parties from their contractual obligations.

Contract Repudiation

The refusal to perform duties or obligations under a contract, which can lead to legal actions for breach of contract.

Breach

A violation or infraction of a law, duty, or agreement.