Which of the Following Statements Regarding Debt Securities Is Incorrect

question 61

Multiple Choice

Which of the following statements regarding debt securities is incorrect?

• A) Debt securities include Held-to-Maturity Debt Investments, Trading Debt Investments, and Available-for-Sale Debt Investments.
• B) When recording the receipt of interest revenue on Trading Debt Investments, Interest Revenue is credited.
• C) If a Held-to-Maturity Debt Investment is purchased at a discount or premium, the discount/premium must be amortized when the interest revenue is earned.
• D) All investments in debt securities are categorized as long-term assets.

---

Definitions:

Eminent Domain

The right of a government or its agent to expropriate private property for public use, with compensation.

Inherent Power

The authority possessed by a sovereign state or government without needing to be granted by a law, deriving from the very nature of the government's existence.

Government

The organization, or group of people governing an organized community, often a state, and responsible for the creation and enforcement of laws.

Governmental Classification

The organization or categorization of information, individuals, or entities by a government based on certain criteria.