Current Accounting for an Available-For-Sale AFS)security Is Consistent with

question 31

Multiple Choice

Current accounting for an available-for-sale AFS) security is consistent with

• A)The financial capital maintenance concept of income because AFS security unrealized gains and losses are reported in earnings.
• B)The financial capital maintenance concept of income because AFS security unrealized gains and losses are reports in other comprehensive income.
• C)The physical capital maintenance concept of income because AFS security unrealized gains and losses are reported in earnings.
• D)The physical capital maintenance concept of income because AFS security unrealized gains and losses are reported in other comprehensive income.

---

Definitions:

Management Fee

A fee charged by fund managers for managing the investments within a fund, typically expressed as a percentage of assets under management.

Treasury Bonds

Long-term government debt securities with a fixed interest rate, issued by the U.S. Treasury.

Relative Value Strategy

An investment strategy that seeks to identify and exploit differences in the prices of related financial instruments, such as stocks and bonds, for potential profit.