If Ziggy Company Concluded That an Investment Originally Classified as Held

question 52

Multiple Choice

If Ziggy Company concluded that an investment originally classified as held to maturity would now more appropriately be classified as available for sale, Ziggy would:

• A)Not reclassify the investment, as original classifications are irrevocable.
• B)Reclassify the investment as available for sale and immediately recognize in net income any unrealized gain or loss on the reclassification date.
• C)Reclassify the investment as available for sale and immediately recognize in accumulated other comprehensive income any unrealized gain or loss on the reclassification date.
• D)Need to restate earnings, as the original classification was in error.

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Definitions:

Endolymph

Endolymph is a fluid within the inner ear that plays a crucial role in hearing and balance by stimulating sensory cells when sound vibrations are received.

Aqueous Humor

A transparent, watery fluid found in the anterior and posterior chambers of the eye, providing nutrients and maintaining intraocular pressure.

Optic Nerve

A paired nerve that transmits visual information from the retina to the brain, playing a critical role in the sense of sight.

Visual Acuity

The clarity or sharpness of vision, often measured in terms of the ability to discern letters or numbers at a standardized distance.