An Unrealized Loss on Non-Trading Securities Is

question 226

Multiple Choice

An unrealized loss on non-trading securities is

• A) reported under Other income and expense in the income statement.
• B) closed-out at the end of the accounting period.
• C) reported as a separate component of equity.
• D) deducted from the cost of the investment.

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Definitions:

Amortization

The process of gradually writing off the initial cost of an asset over a period, often used for intangible assets like patents and copyrights.

Bond Discount

The difference between the face value of a bond and the price for which it sells when the selling price is lower than its face value.

Indirect Method

A cash flow statement technique that starts with net income and adjusts for changes in balance sheet accounts to arrive at operating cash flow.

Capital Expenditures

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.