An Investor in Available-For-Sale Securities Has the Following Information Available

question 72

Multiple Choice

An investor in available-for-sale securities has the following information available at December 31,2012: How does the investor report the change in market value on the available-for-sale securities at December 31,2012?

• A)unrealized loss of $1,000 on income statement
• B)unrealized gain of $1,000 on income statement
• C)$1,000 is added to accumulated other comprehensive income account on the balance sheet
• D)$1,000 is subtracted from the accumulated other comprehensive income account on the balance sheet

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Definitions:

Rational Consumer

An individual who makes purchase decisions that maximize their utility, given their budget constraints.

Utility Schedule

A utility schedule is a table or graph showing the levels of satisfaction or utility that a consumer gets from consuming different quantities of a good or service.

Candy Bars

Pre-packaged bars made primarily of chocolate and often combined with other ingredients like nuts, caramel, or nougat.

Marginal Utility

The change in satisfaction or utility an individual gains from consuming one additional unit of a good or service.