The Fair Value Adjustment for Trading Securities

question 20

Multiple Choice

The fair value adjustment for trading securities

• A) is reported as an increase to net income when the fair value of investments is greater than cost.
• B) is reported as other comprehensive income.
• C) is reported as an unrealized gain or loss on the statement of changes in equity.
• D) is only allowed when the fair value of investments is less than cost.

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Definitions:

Title

A formal document or designation indicating ownership of property or the right to claim something.

Personal Property

Assets that are movable and not fixed permanently to one location, such as furniture, vehicles, and stocks, as opposed to real estate or land.

Ownership Rights

Legal rights and claims that one has over property or assets, allowing them to use, manage, and dispose of them as they see fit.

Personal Property

Assets that are movable and not permanently attached to one location, such as furniture or vehicles.