Unrealized Gains or Losses on Available-For-Sale Investments Are Reported As

question 88

Multiple Choice

Unrealized gains or losses on available-for-sale investments are reported as:

• A)part of a company's pro forma earnings only.
• B)part of a company's net income or loss from its continuing operations.
• C)other comprehensive income, since these items do not enter into the determination of net income.
• D)none of the above.

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Definitions:

Accounting Equation

The fundamental principle of accounting that states Assets = Liabilities + Equity, which must always be in balance for accurate financial reporting.

Net Income

Net income is the total profit of a company after all expenses, including taxes and operational costs, are subtracted from its total revenue.

Total Liabilities

The sum of all financial obligations a company has to external parties, including both short-term and long-term debts.

Accounting Equation

The fundamental formula in accounting that states assets equal liabilities plus equity (Assets = Liabilities + Equity).