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.

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Definitions:

Fixed Exchange Rates

A system where the value of a currency is pegged to another currency, a basket of currencies, or a commodity such as gold, and does not fluctuate in the foreign exchange market.

Gold Standard

A monetary system in which the standard unit of currency is based on a fixed quantity of gold, ensuring stability and trust in currency value.

Balance of Trade Deficit

A Balance of Trade Deficit occurs when a country's imports of goods and services exceed its exports, indicating that more money is flowing out of the country to buy foreign goods than is coming in from the sale of domestic goods.

United States

A country in North America consisting of 50 states and a federal district, known for its significant economic and political influence globally.