Which of the Following Statements Is Not True

question 27

Multiple Choice

Which of the following statements is not true?

• A)Trading investments can be classified as either current or non-current assets on the statement of financial position.
• B)Under the fair value model, both realized and unrealized gains and losses are reported in the income statement.
• C)Under the amortized cost method, no unrealized gains or losses are reported.
• D)Non-strategic investments are purchased to generate investment income.

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Definitions:

Discount

It is a reduction from the usual cost of something, often applied to encourage early payment or to reward bulk purchases.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time, typically expressed in terms of an annual percentage rate.

Market Interest Rate

The current rate of interest available in the market that borrowers must pay to obtain funds.

Carrying Value

The book value of assets and liabilities on a company’s balance sheet, often different from the market value.