When a Firm Sells a Trading Security,it Recognizes

question 33

Multiple Choice

When a firm sells a trading security,it recognizes:

• A) the average of the selling price and the book value as a gain or loss in measuring net income.
• B) the difference between the selling price and the book value as a gain or loss in measuring net income.
• C) amortizes any difference between the acquisition cost and maturity value as interest revenue over the life of the debt.
• D) the difference between the selling price and the acquisition cost of the security as a realized gain or loss on the income statement.

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