An Analyst Is Reviewing the Financial Statements of a Company

question 68

Multiple Choice

An analyst is reviewing the financial statements of a company and notices that in the shareholders' equity section they have the following account: "Accumulated other comprehensive income-unrealized gains on investments." Which of the following statements about the company is true?

• A)The company must actively engage in trading securities as part of its business.
• B)The assets on the balance sheet are understated by that same amount.
• C)There are unrealized gains reported on the income statement.
• D)The company's net income would be higher if any investments held by the company were classified as FVTPL securities.

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Definitions:

Endocrine System

A network of glands that produce and release hormones to regulate various body functions including metabolism, growth, and mood.

Glands

Organs in the body that secrete hormones or other substances directly into the blood or onto a surface within or outside the body.

Association Areas

Areas of the cerebral cortex that are not involved in primary motor or sensory functions; rather, they are involved in higher mental functions, such as learning, remembering, thinking, speaking, and integrating information.

Neural Networks

Computational models inspired by the human brain's network of neurons, used in machine learning and artificial intelligence for pattern recognition and data analysis.