Under the Fair Value Through Other Comprehensive Income Method, Unrealized

question 94

Multiple Choice

Under the fair value through other comprehensive income method, unrealized gains and losses:

• A)are recognized in the operating income.
• B)are accumulated in other comprehensive income.
• C)are recognized in net income.
• D)are charged directly to retained earnings.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered or used, but not yet paid for.

Prepaid Expenses

Payments made for goods or services to be received in the future, recognized as assets on the balance sheet until they are incurred.

Journal Entry

A record of financial transactions in the accounting books of a business, indicating the accounts affected and the amounts.

Credits

Refers to the accounting entries that increase liabilities or decrease assets, representing the opposite effect of debits in double-entry bookkeeping.