The Balance in the Unrealized Loss-Equity Account Will

question 97

Multiple Choice

The balance in the Unrealized Loss-Equity account will

• A) appear on the balance sheet as a contra asset.
• B) appear on the income statement under Other Expenses and Losses.
• C) appear as a deduction in the stockholders' equity section.
• D) not be shown on the financial statements until the securities are sold.

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Definitions:

Strike Price

The pre-determined price at which the holder of an option can buy (in the case of a call option) or sell (in case of a put option) the underlying asset.

Market Price

The prevailing selling or buying price of a service or asset in the market.

Break-Even Price

The price at which total revenues equal total costs, and the business or investor neither makes a profit nor incurs a loss.

Put

An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time.