All of the Following Are True for Available-For-Sale Equity Securities

question 173

Multiple Choice

All of the following are true for Available-for-sale equity securities except:

• A)Are recorded at cost when acquired.
• B)May earn interest that is reported in that year's income statement.
• C)May be classified as either short-term or long-term securities.
• D)Are reported at market value on the balance sheet.
• E)Are actively managed like Trading Securities.

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Definitions:

Real Assets

Physical or tangible assets that have intrinsic value, such as real estate, commodities, and natural resources.

Financial Assets

Assets that derive value from a contractual claim, such as bank deposits, bonds, and stocks.

Goods and Services

refers to the output of an economy that can be physically consumed (goods) or experienced (services), and form the basis for economic transactions.

Nonconforming Mortgage Loans

Mortgage loans that do not meet standard bank criteria, often used for borrowers with poor credit histories or for properties that are unique.