At the End of the First Year of Operations, the Total

question 25

Multiple Choice

At the end of the first year of operations, the total cost of the trading securities portfolio is $240,000. Total fair value is $250,000. The financial statements should show

• A) an addition to an asset of $10,000 and a realized gain of $10,000.
• B) an addition to an asset of $10,000 and an unrealized gain of $10,000 in the equity section.
• C) an addition to an asset of $10,000 in the current assets section and an unrealized gain of $10,000 in "Other income and expense."
• D) an addition to an asset of $10,000 in the current assets section and a realized gain of $10,000 in "Other income and expense."

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Definitions:

α

Denotes the level of significance in hypothesis testing, representing the probability of rejecting the null hypothesis when it is actually true.

Z Statistic

A type of standard score that indicates the number of standard deviations a datum is from the mean of a distribution, used in significance testing.

One-tailed Test

A statistical hypothesis test in which the region of rejection is on only one side of the sampling distribution.

α

Symbol often used to represent the level of significance in hypothesis testing, typically denoting the probability of making a Type I error.