All of the Following Statements Regarding Accounting for Trading Securities

question 59

Multiple Choice

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

• A)The entire portfolio of trading securities is reported at fair value.
• B)An unrealized gain or loss from a change in fair value is reported on the income statement.
• C)A realized gain or loss is recorded when the securities are sold and reported on the income statement.
• D)When the period-end fair value adjustment for the portfolio of trading securities is computed,it includes the cost and fair value of any securities sold.
• E)Any prior period fair value adjustment to the portfolio is not used to compute the gain or loss from sale of individual transactions.

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Definitions:

Minutes

A unit of time equal to one sixtieth of an hour, or 60 seconds.

Hours

A time unit equal to 60 minutes, used to measure duration.

Dimensional-Analysis

A technique in physics and engineering used to convert one set of measurements to another, ensuring that the mathematical equation relationships remain consistent.

Conversion Factor

A numerical value used to convert a quantity expressed in one unit to the equivalent quantity expressed in another unit.