Unrealized Gains or Losses on Trading Securities Are Reported On

question 20

Multiple Choice

Unrealized gains or losses on trading securities are reported on:

• A)the income statement as Other Revenue, Gains, and Losses.
• B)the balance sheet.
• C)the income statement as Revenues or Expenses.
• D)none of the financial statements.

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Definitions:

Materiality

A principle that dictates that all significant information that could influence the decision-making process of users of financial statements should be disclosed.

Fair Value

The estimated market value of an asset or liability, based on current prices in an open market.

Financial Statements

Formal records that outline the financial activities and condition of a business, including balance sheets, income statements, and cash flow statements.