Discuss the Following Questions

question 47

Essay

Discuss the following questions.
Required:
What securities must be classified within one of the three categories of held to maturity, available for sale, and trading? (Do not describe how to determine how securities are classified among these three categories.) Identify the four primary recording activities related to investments in securities.

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Definitions:

Induced Consumption

Consumption that changes in response to changes in income or wealth, as opposed to autonomous consumption, which does not change when income changes.

Disposable Income

The amount of money that households have available for spending and saving after income taxes have been deducted.

Average Propensity

The average tendency of an entity (such as a household) to spend a portion of income; can pertain to consumption or saving.

Disposable Income

Disposable income is the portion of an individual's or household's earnings left over for savings and expenditures after paying off income taxes.