All of the Following Statements Regarding Accounting for Trading Securities

question 179

Multiple Choice

All of the following statements regarding accounting for trading securities under U.S. GAAP are true except:

• A) An unrealized gain or loss from a change in fair value is reported on the income statement.
• B) A realized gain or loss is recorded when the securities are sold and reported on the income statement.
• C) Any prior period fair value adjustment to the portfolio is not used to compute the gain or loss from sale of individual transactions.
• D) When the period-end fair value adjustment for the portfolio of trading securities is computed, it includes the cost and fair value of any securities sold.
• E) The entire portfolio of trading securities is reported at fair value.

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Definitions:

Standard Deviations

A statistic that measures the dispersion of a dataset relative to its mean, used to quantify the amount of variation or spread of a set of data values.

Stocks A and B

Placeholder names used in discussions to refer to two specific, but unspecified, stocks or to compare aspects of different stocks.

Return

The income generated from an investment, expressed as a percentage of the investment's original cost.