What Are the Effects on the Accounting Equation from the Recognition

question 41

Multiple Choice

What are the effects on the accounting equation from the recognition of an unrealized loss on trading securities?

• A)Assets and stockholders' equity decrease.
• B)No effects; unrealized gains and losses should not be recorded.
• C)Assets and liabilities decrease.
• D)Stockholders' equity decreases and liabilities increase.

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Definitions:

Radius

The distance from the center to the boundary of a circle, sphere, or other rounded geometric figure.

Surface Area

The total area of the outer surface of a three-dimensional object.

First Statement

The initial line or command in a sequence of code that is executed in a program or script.