F3: Investments in Debt & Equity Securities

Question 1

Describe trading securities

Answer 1

• Intended to resale in the near future
• Current assets
• FMV
• Unrealized G/L on I/S
• Realized G/L on I/S

Question 2

Describe available-for-sale

Answer 2

• Current or Non-current
• FMV
• Unrealized G/L on OCI
• Unrealized G/L on accum on B/S in equity as accum OCI

Question 3

Describe held-to-maturity

Answer 3

• Non-current
• Amortized cost
• No unrealized G/L
• Realized G/L on I/S

Question 4

What’s a discount bond?

Answer 4

Market Rate > Stated Rate

Question 5

What’s a premium bond?

Answer 5

Market Rate < Stated Rate