Question

2 points Question 1.24 The valuation allowance for trading investments account is found on the o income statement as other revenve (expense) balance sheet as an adjustment to the asset account o statement of retained eamings O balance sheet as an adustment to stockholders' equity 2 points Question 1.25 Trading securities are reported at fair value on the balance sheet and as unrealized gains or losses on the income statement o not reported on the balance sheet reported as unrealized gains or losses on the income statement o reported at tair value in the balance sheet. 2 points Question 1.26 Changes in the value of available-for-sale securities are: o recognized on the inoome statement o reported as part of stocikhoiders equiry o nat recogrized o recognized on the inoome stacemen and as pat of stockholders equity. ☆ Question 1.27 GAAP requires trading and available-for-sale investments to be reported at their 2 points n net realzable value o market value O istorical cost n tar value Question 1.28 Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? 2 points o a gain on the sale of land O a deorease in accounts payable o dividends paid on oommon stock o an increase in accrued labiites

Answer 1

1.24 (b)

Balance sheet as adjustment to asset account.Trading investment are shown at fair value .Valuation allowance is adjusted to investment account.

1.25 (a)

Trading securities are those which are held for sale . It is reported on fair value in balance sheet and unrealized gain or loss reported in income statement.

1.26 (b)  

Any unrealized gain or loss on available for sale securities is shown as separate item in stockholder's equity section of balance sheet

1.27 (d)

As per GAAP trading securities and available for sale securities are shown at fair value.

1.28 (d)

Increase in accrued liabilities mean liabilities are not paid ,leads to indirectly increase in cash.Thus it is added to net income to calculate cash from operating activities.