Question

Question 21 4 pts Three different classifications of investments are possible on a company's balance sheet: (1) trading securities, (2) available-for-sale securities, and (3) held-to-maturity securities. Absent any special recognition agreement by the company, which of these investments should be reported at fair value at period end? Held-to-maturity securities and available-for-sale securities Trading securities only. Trading securities and available for sale securities All three classifications are to be reported at fair value. Question 22 4 pts Comprehensive income is a concept that includes which of the following? o Dividends paid to stockholders, net income, pald-in capital in excess of par on a stock purchse Infusion of capital from preferred stockholders, interest revenue, unrealized gain loss on available for sale securities Unrealized pain loss on trading securities, dividends paid to stockholders, interest expense Net Income, revenue from sales, unrealized gain/loss on available for sale investments

Answer 1

21 The answer is B as both the Trading securities and available to sell securities are purchased with an intention to sell, so on each balance sheet date they have to be reported at their fair value. Held for maturity securities is reported as a non current asset and have an amortized cost on a company's financial statements.

22, The answer is D, comprehensive income includes all income from operating and financial events. Comprehensive income includes net income and unrealized income, such as unrealized gains or losses on various financial instruments and any gain or losses from foreign currency transaction etc