When Transferring Investments Between Categories, Unrealized Holding Gains for Securities

question 102

Multiple Choice

When transferring investments between categories, unrealized holding gains for securities transferred from trading to available-for-sale

• A) must be realized on the income statement.
• B) must be recognized on the income statement.
• C) must be realized and reported in comprehensive income.
• D) need no accounting since they have already been recognized in net income.

---

Definitions:

Monopoly

A market structure characterized by a single seller selling a unique product in the market.

Product Differentiation

The technique of setting a product or service apart from competitors to enhance its appeal to a distinct target audience.

Long-run Profits

Earnings achieved over an extended period, where all inputs can be adjusted by firms, reflecting the company's ability to adapt and reoptimize operations.

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogeneous products, free entry and exit, and perfect information.