Investments

Question 1

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

Answer 1

At FV (current or noncurrent asset)

Question 2

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

Answer 2

Included in OCI (Other Comprehensive Income)

Question 3

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

Answer 3

HTM - SE / Trading Securities - Current Period.

Question 4

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

Answer 4

Amortized cost (Current or Noncurrent assets)

If reclassified as AFS - Unrealized G/L go to SE
If reclassified as TS - Unrealized G/L recognized in Current Period

Question 5

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

Answer 5

Trick question - Unrealized g/l are not applicable because they are HTM

Question 6

How are Trading Securities recorded on the Balance Sheet?

Answer 6

At FV as a Current Asset

Unrealized g/l are recorded on the I/S

If they are reclassified as HTM or AFS - there is no effect upon transfer

Question 7

How are Trading Securities Unrealized G/L treated?

Answer 7

Recorded on the I/S

If they are reclassified as HTM or AFS - there is no effect upon transfer