Investments

Question 1

Financial

How are Available-For-Sale securities recorded on the Balance Sheet?

Answer 1

At Fair value as either Current or Non-current assets.

Question 2

Financial

How are Available-For-Sale security Unrealized G/L treated?

Answer 2

Included in OCI (Other Comprehensive Income)

Question 3

Financial

How are Unrealized G/L for Available-For-Sale securities that are reclassified to Held-to-Maturity or Trading Securities treated?

Answer 3

HTM - Stockholder’s Equity / Trading Securities - Current Period.

Question 4

Financial

How are Held-to-Maturity securities recorded on the Balance Sheet?

Answer 4

Amortized cost as Current or Non-current assets. If reclassified as AFS - Unrealized G/L go to Stockholder’s Equity If reclassified as Trading Securities - Unrealized G/L recognized in Current Period

Question 5

Financial

How are Held-to-Maturity securities Unrealized G/L treated?

Answer 5

Trick question - Unrealized gains or losses are not applicable because they are HTM

Question 6

Financial

How are Trading Securities recorded on the Balance Sheet?

Answer 6

At Fair Value as a Current Asset Unrealized gains/losses are recorded on the Income Statement If they are reclassified as held-to-maturity or available-for-sale- there is no effect upon transfer.

Question 7

Financial

How are Trading Securities Unrealized G/L treated?

Answer 7

Recorded on the Income Statement If they are reclassified as HTM or AFS - there is no effect upon transfer.