Under the Fair Value Through Net Income Model, Holding Gains

question 101

Multiple Choice

Under the fair value through net income model, holding gains are

• A) recognized in other comprehensive income only.
• B) recognized in either net income or other comprehensive income.
• C) recognized in net income only.
• D) ignored.

---

Definitions:

Compounded Semiannually

Interest that is computed and appended to the original amount semi-annually.

Effective Rate

The actual interest rate that an individual earns or pays on an investment, loan, or other financial product, after compounding and other factors are taken into account.

Car Loan

A financial loan specifically used to purchase a car, typically secured by the car itself as collateral.

Periodic Rate

The interest rate applied to a financial loan or savings account that is compounded at regular intervals over a period of time.