When a Company Sells a Short-Term Available-For-Sale Security,the Gain on the Sale

question 72

Multiple Choice

When a company sells a short-term available-for-sale security,the Gain on the Sale of the Investment in Available-for-Sale Securities is reported on the:

• A)revenues section of the income statement.
• B)current assets section of the balance sheet.
• C)other revenues and gains section of the income statement.
• D)stockholders' equity section of the balance sheet.

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Definitions:

Cash Flow

The sum of funds moving into and out of a company, particularly influencing its liquidity.

Salaries

Payments made to employees for their services, typically expressed as an annual sum and paid at regular intervals.

Investing Activities

Financial activities related to the purchase and sale of long-term assets or investment securities, impacting a company's cash flow.

Financing Activities

Transactions involving raising capital and repaying investors, including debt, equity, and dividend payments as part of a company's cash flow.