Asked Dec 20, 2019

What is the major difference in the accounting for a portfolio of trading securities and a portfolio of available-for-sale securities?


Expert Answer

Step 1

Image Transcriptionclose

Trading securities: These are short-term investments in debt and equity securities with an intention of trading and earning profits due to changes in market prices. Available-for-sale securities: These are short-term or long-term investments in debt and equity securities with an intention of holding the investment for some strategic purposes like meeting liquidity needs, or manage interest risk.


Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Comment on the following statement: “In a normal-costing system, the amounts in the Manufacturing Ov...

A: The statement is not correct. In normal costing, the manufacturing overhead control account will not...


Q: The annual examination of Felton Company’s financial statements by its external public accounting fi...

A: Click to see the answer


Q: Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Smiley...

A: a. Prepare the journal entry to record the issuance of bonds on April 1.


Q: On January 22, Zentric Corporation issued for cash 180,000 shares of no-par common stock at $4. On F...

A: Common stock: These are the ordinary shares that a corporation issues to the investors in order to r...


Q: Alfred Company started its operation with authorization of 50,000 shares of $50 par value ordinary s...

A: Journal Entries in the books of Alfred Company


Q: According to a summary of the payroll of Guthrie Co., $560,000 was subject to the 6.0% social securi...

A: Employer payroll taxes: The taxes which the employer must pay to the employees with their salaries i...


Q: Pro-Builders Corporation has 1,500,000 shares of $5 par common stock outstanding. On September 2, Pr...

A: Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in...


Q: What is a mortgage note?

A: Long-terms notes payable: Long-term notes payable represent a legal and written promise made by the ...


Q: What is the closing process?

A: Closing Process: Closing process is a process which consists of journalizes the closing entries of a...