If Dinsburry Company Concluded That an Investment Originally Classified as a Trading

question 141

Multiple Choice

If Dinsburry Company concluded that an investment originally classified as a trading security would now more appropriately be classified as held to maturity, Dinsburry would:

• A) Not reclassify the investment, as original classifications are irrevocable.
• B) Reclassify the investment as held to maturity and immediately recognize in net income all unrealized holding gains and losses that have not already been recognized as of the reclassification date.
• C) Reclassify the investment as held to maturity and treat the fair value as of the date of reclassification as the investment's amortized cost basis for future amortization.
• D) Reclassify the investment as held to maturity, but there would be no income effect.

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Definitions:

Disinterested Perspective

An unbiased, objective view without personal interest, prejudice, or financial stake.

Early Nineteenth Century

A period marked by significant social, political, and cultural changes in the world, roughly spanning the years from 1801 to 1830.

Hegel

A German philosopher, Georg Wilhelm Friedrich Hegel, known for his contributions to idealism and his dialectical method of thesis, antithesis, and synthesis.

Reflective

Characterized by deep thought or contemplation, often about oneself or one's experiences and actions.