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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

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

To determine

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.

To describe: The primary difference in accounting of trading and available-for-sale securities

Explanation

The main difference in accounting trading and available-for-sale securities is that the changes in fair value of portfolio of trading securities are reported...

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