A Company Failed to Record Unrealized Gains of $20 Million

question 63

Multiple Choice

A company failed to record unrealized gains of $20 million on its available for sale security investments. Its tax rate is 30%. As a result of this error, comprehensive income would be:

• A)Understated by $14 million.
• B)Understated by $6 million.
• C)Understated by $20 million.
• D)Unaffected.Unrealized gains on securities available for sale are reported net of tax in other comprehensive income.

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Definitions:

Psychological Tests

Standardized measures designed to assess various aspects of a person's mental health, personality, intelligence, or abilities.

Self-evaluations

The process through which individuals assess and analyze their own performance, abilities, and qualities.

Cross-sectional Methods

Research methods that analyze data from a population, or a representative subset, at a specific point in time.

Longitudinal Studies

Research methods that involve repeated observations of the same variables (e.g., people) over short or long periods of time to detect changes and developments.