A Company Failed to Record Unrealized Gains of $20 Million

question 1

Multiple Choice

A company failed to record unrealized gains of $20 million on its trading security investments. Its tax rate is 30%. As a result of this error, total shareholders' equity would be:

• A)Understated by $14 million.
• B)Understated by $7 million.
• C)Understated by $20 million
• D)UnaffecteD.Unrealized gains on trading securities are included in earnings, so retained earnings would be increased by the after-tax amount: $20,000,000 x (1 - 30%) = $14,000,000.

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Definitions:

Self-esteem

An individual's subjective evaluation of their own worth, encompassing beliefs and emotions such as triumph, despair, pride, and shame.

Self-worth

An individual’s perception of their own value or worthiness, often influencing their feelings of esteem and confidence.

High Self-monitors

Individuals who are highly observant of their own behavior and how it affects social situations, allowing them to adjust their actions accordingly.

Reading Employees' Needs

The ability of managers or leaders to understand and address the various personal and professional requirements or desires of their employees.