"Gains Trading" or "Cherry Picking" Involves

question 63

Multiple Choice

"Gains trading" or "cherry picking" involves

• A)moving investments whose value has decreased since acquisition from non-trading to held-for-collection in order to avoid reporting losses.
• B)reporting investments at fair value but liabilities at amortized cost.
• C)selling investments whose value has increased since acquisition while holding those whose value has decreased since acquisition.
• D)All of these answer choices are considered methods of "gains trading" or "cherry picking."

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate costs to units of production in processes where the units are not yet complete, converting them into the amount of finished goods units.

Assembly Department

A section within a manufacturing process where components are joined together to form a finished product.

FIFO Method

An inventory valuation method standing for "First In, First Out," assuming that the first items purchased or produced are the first ones sold.

Equivalent Units

A term used in cost accounting to represent a quantity of production expressed in terms of fully completed units, used in calculating the cost per unit during a period.