If the Combined Market Value of Trading Securities at the End

question 34

Multiple Choice

If the combined market value of trading securities at the end of the year is less than the market value of the same portfolio of trading securities at the beginning of the year, the difference should be accounted for by

• A)reporting an unrealized loss in security investments in the stockholders' equity section of the balance sheet.
• B)reporting an unrealized loss in security investments in the income statement.
• C)a footnote to the financial statements.
• D)a credit to Investment in Trading Securities.
• E)None of these answer choices is correct.

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Definitions:

Process Costing

An accounting methodology that traces and accumulates direct costs, and allocates indirect costs of a manufacturing process, to determine the cost of each product.

Processing Department

An organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product.

Equivalent Units

A measure used in cost accounting to express the amount of work done by employees and machines in terms of fully completed units of output.

Ending Inventory

The total value of all inventory, including raw materials, work-in-process, and finished goods, at the end of an accounting period.