With Regard to Available-For-Sale Securities, Which of the Following Is

question 35

Multiple Choice

With regard to available-for-sale securities, which of the following is used to compute net income?

• A)Realized gains
• B)Unrealized gains
• C)Both unrealized gains and realized gains
• D)Neither realized gains nor unrealized gains

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Definitions:

Gross Profit Method

An accounting technique used to estimate the amount of ending inventory and cost of goods sold, based on the gross profit margin.

Ending Inventory

The total value of all unsold goods and materials that a company holds at the end of an accounting period.

Gross Profit on Sales

The difference between sales revenue and the cost of goods sold before deducting overheads, taxes, or interest.

FIFO Retail Inventory Method

An accounting method for valuing inventory where the first items purchased are the first ones to be sold.