Trading Securities Purchased in 2011 for $90,000 Were Valued at $92,000

question 173

Multiple Choice

Trading securities purchased in 2011 for $90,000 were valued at $92,000 on December 31, 2011. At December 31, 2013 the securities had a fair value of $95,000. The journal entry on December 31, 2013 would include a:

• A) debit to the Investment account for $5,000.
• B) debit to the Investment account for $3,000.
• C) credit to the Unrealized Gain account for $5,000.
• D) debit to the Unrealized Loss account for $3,000.

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Definitions:

Cash Account

An account in a brokerage or financial statement that shows the amount of cash available for transactions.

Cash Payments

Monetary transactions involving the outflow of cash to settle debts, purchase goods, or acquire services.

Bank Statement Balance

The ending balance on a bank statement for a particular period, reflecting all transactions including deposits, withdrawals, fees, and interest earned.

Cash Account Balance

Cash account balance represents the amount of cash or cash equivalents a company or individual holds in their account at any given time.