Which of the Following Statements Is CORRECT

question 76

Multiple Choice

Which of the following statements is CORRECT?

• A)Trading securities can be current or long-term assets.
• B)Available-for-sale securities are always current assets.
• C)Held-to-maturity securities are always current assets.
• D)Trading securities are always current assets.

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Definitions:

Journal Entries

The method by which financial transactions are recorded in the accounting records, detailing the accounts affected and the amounts.

Bonds at Par

A situation where bonds are issued or traded at their face value or principal amount.

Bond Interest

The periodic payment made to the holders of a bond, representing a fixed income for the bond's duration.

Bonds at Discount

Bonds issued for less than their face value, where the difference between the purchase price and the face value is the interest earned by the investor.