Why are holding gains and losses treated differently for trading securities and securities available-for-sale?

Q: Explain how to Adjust Trading Security Investments to Fair Value.

A:

Q: Do we record unrealized gain or loss as a debit or a credit balance when making the fair value…

A: Financial accounting records all the financial transactions occurred during the accounting period.…

Q: What are the Derivative Securities? Elaborate in detail the different types and transactions of…

A: Derivative Contracts are used by parties to earn profit by executing a transaction at a favorable…

Q: Why do you suppose accounting regulations requirecompanies to report paper losses or gains from…

A: This Statement establishes standards of accounting for exchange-traded futures contracts (other than…

Q: Under which of the following markets securities are newly issued? a. Primary Market b. Intermediary…

A: Financial security is a tradable asset issued by business entities and governments to raise capital…

Q: What are the considerations that may be received in exchanged for share capital? What are the…

A: The money a firm raises by issuing common or preferred shares is referred to as share capital. With…

Q: How are unrealized gains/losses on trading securities recorded?

A:

Q: For fi nancial assets classifi ed as trading securities, how are unrealized gains and lossesrefl…

A: Trading securities are debt or equity assets that management expects to aggressively sell for gain…

Q: Which property is valued using the book value?    Bonds being traded in the bond market Annuity…

A: Book value is companies net difference between total assets and total liabilities.  Book value is…

Q: Discuss the difference between debt securities market and equity securities market.

A: The Debt securities market refers to the market which trades in debt that has to be repaid to the…

Q: What are the similarities and differences in equity valuation and bond valuation?

A: Bonds: Bonds are a debt instrument on which interest is paid. They can be issued at a discount/par…

Q: According to our authors, when is the purchase of stock in one company by another classified as a…

A: Trading security- Classification of securities- There are three different classification: a) held…

Q: what is the difference between marketable equity securities held as financial asset at fair value…

A: Financial assets are the intangible assets, which are used as investment asset by the investors.…

Q: Methods/instruments that banks use to hedge the risks pertaining trading securitie

A: Hedging is the process of risk management through which an investor mitigated and reduce its risks…

Q: Marketable securities bought and held primarily for sale in the near term are classified as:  a)…

A: Marketable securities are securities which is unrestricted and can be bought or sold on a public…

Q: Describe how to report equity securities with controlling influence.

A: Equity securities with controlling interest refers to holding more than 50% of interest in a entity.

Q: is a method of evaluating securities by iden

A: Explanation : Technical analysis can be understood as the way of appraising commodities that…

Q: How do money markets and capital markets differ? Identify the types of securities traded in money…

A: The Money market is a feature of the economy that offers short term investment option. A…

Q: What are trading securities?

A: Trading securities are a form of investment by a company. Here securities are being purchased for…

Q: What are the differences between held to Maturity and Held for Trading Securities and what are the…

A: Securities held by an entity can either be held to Maturity or it can be Held for Trading…

Q: Why are held-to-maturity investments applicable only todebt securities?

A:

Q: Stock appreciation right would normally be settled through

A: Second option is wrong because stock appreciation right is not settled through issue of share…

Q: why is money market necessary but not sufficient for the liquidity of securities on the stock market

A: Money market (MM) is a place where short term (ST) securities are traded. Generally, governments or…

Q: Investments in equity securities for which the investor has insignificant influence over the…

A: In layman’s words, financial management is the management of the finance or funds in an…

Q: Under what circumstances is the equity method used to account for an investment in stock?

A:

Q: Why are unrealized gains and losses on trading securities reported in the incomestatement?

A: Unrealized gains and losses: Trading securities are reported at their fair values. Unrealized gains…

Q: What accounting treatments are appropriate for investments in equity securities without readily…

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: 3. Which of the following categories of investments are reported at their fair values on the balance…

A: A security is a financial mechanism tool issued by a company or government that grants the customer…

Q: trading

A: Ans. Debt investments include government, corporate and municipal bonds and includes real estate…

Q: How does tr

A: Introduction : In simple words, bonds refers to the fixed income securities and the holder of it are…

Q: What is the fundamental difference in a general stock redemption vs. a Liquidating Distribution?…

A: Income tax is the payment required to be made to the authority which is charged to collect the…

Q: What are stock rights? How does the issuing companyaccount for them?

A: Stock refers to the securities of a company which are issued by the company to the investors. It is…

Q: What is the difference between trading securities and available for sale securities, and how are…

A: The financial instruments that are tradable and can be used to raise capital in private and public…

Q: Under what circumstances do we use the equity method to account for an investment in stock?

A: The equity method seems to be an accounting methodology that a firm uses to recognize profits gained…