How would a debit balance in Unrealized Gain (Loss) on Available-for-Sale Investments be reported in the financial statements?   Is it better to have an unrealized or realized gain and what are the effects on your bottom line?  Also, how are the balance sheet and income statement affected by fair value accounting?

Q: Where on the financial statements is an unrealized holding gain or loss on trading investments…

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Q: What are the factors contributing to the trend toward fair value accounting?

A: Fair value accounting refers to the valuation and accounting of the asset or liabilities based on…

Q: Is it necessary for an investor to report individual amounts for the three categories of…

A: Held-to-maturity security: The debt securities which are held by the investor with an intent to hold…

Q: What are the different risks associated in the accounting of investments?

A: Answer: There is always risk while auditing and accounting.

Q: Discuss the accounting problems associated with interest capitalization.

A: Interest capitalization: Capitalization interest is the cost of funds that are used to finance for…

Q: If Valuation Allowance for Available-for-Sale Investments has a credit balance, how is it treated on…

A: Available-for-sales securities: These are short-term or long-term investments in debt and equity…

Q: How would you describe a change that a company makes from the equity method to the fair-value method…

A: Definition:   Equity method: Equity method is the method used for accounting equity investments…

Q: Consider our requirement to provide ‘true’ accounting information (the ‘true and fair’ requirement).…

A: A cash flow hedge is a method used by the investor in order to offset the risks of cash flow with…

Q: are payments and receipts of interest classified as operating activities rather than as financing or…

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Q: Provide some examples of items that would be adjusted directly against equity, rather than being…

A: Example of items that would be adjusted directly against equity, rather than being included as part…

Q: Debt investments are recorded at cost when purchased. True or False True False

A: Introduction:   When an investor loaned money to a corporation or project sponsor, the investor…

Q: What are the benefits of pro forma financial statements?

A: Pro forma financial statement:Pro forma financial statements is a report which are prepared on the…

Q: What is “comprehensive income”? Its composition varies from company to company but may include which…

A: Comprehensive income: The total of net income and other comprehensive income (OCI) is referred to as…

Q: How should an item of information that helps explain the riskiness of the Investments account…

A: Financial Statement:   A financial statement is the complete record of financial transactions that…

Q: Which of the following statements regarding equity is not true? It is defined independently of…

A: The accounting equation states that assets equals to sum of liabilities and shareholders equity.

Q: Which of the following statements is TRUE regarding the equity method?    A. The equity method is…

A: The investor's equity in the associate adjusts in direct connection to the adjustments in the…

Q: Overall do you agree or disagree with the argument that financial statements should be stated as…

A: Historical cost refers to the original purchase cost of an asset whereas fair value is an estimate…

Q: What are financial statements and explain different types of users of finanacial statement including…

A: Financial statements are statements that are prepared at the end of the period in order to analyse…

Q: Provide some instances of things that would be adjusted directly against equity rather than being…

A: This question explained about give examples of items that might be adjusted against equity rather…

Q: Financial Asset at Fair Value under OCI would have its gain or loss reported at what Financial…

A: Gain or loss on Financial Asset at Fair Value under OCI will be shown as other comprehensive income…

Q: Which statement is incorrect regarding classification of financial assets?   a. An entity can…

A: Financial Assets: The financial assets refers to contractual agreement between two parties for a…

Q: Provide an example of items that would be adjusted directly against equity rather than being…

A: Stockholders’ equity: The claims of owners on a company’s resources, after the liabilities are paid…

Q: In relation to investments and fair value, what are the two categories of investments that companies…

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

Q: The account Unrealized Gain (Loss) on Trading Investments should be included on the

A: Unrealized gains and losses: These are gains and losses which are unrealized and are the result of…

Q: Provide some examples of items that would be adjusted directly against equity, rather than being…

A: Following are the example of items that are adjusted directly against equity, rather than being…

Q: Why is the Equity Valuation method is preferable from the point of view of an investor in valuing…

A: Valuation is the process of ascertaining the market value of the business or an asset. The valuation…

Q: Directions: Please select the appropriate answer on the statement below; B - If the statement is…

A: Shareholder's Equity:- It is the amount which the company accumulated from the investment made by…

Q: Provide some examples of items that would be adjusted directly against equity, rather than being…

A: Stockholders’ equity: The claims of owners on a company’s resources, after the liabilities are paid…

Q: Why is an owner's valuation of a borrowing business excluded from stated net worth to arrive at…

A: When we  say 'net worth' of a business it is  Assets - Liabilities of business.…

Q: Why are claims on income discretionary with equityfinancing but nondiscretionary with debt…

A: Liability: In monetary bookkeeping, a liability is characterized as the future penances of financial…

Q: Is unrealized loss deducted in marketable equity securities held as financial asset at fair value…

A: Yes ,unrealized loss reported  as component of other comprehensive income and marketable equity…

Q: Demonstrate how to identify and account for equity investments classified forreporting purposes as…

A: Equity investments are those investments that are invested in a company through purchase of shares…

Q: Why are unrealized gains and losses on available-for-sale securities not reported in theincome…

A: Definition: Generally Accepted Accounting Principle (GAAP): Generally Accepted Accounting Principle…

Q: How are the balance sheet and income statement affected by fair value accounting?

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Q: What is the fair-value option for reporting equity method investments? How do the equity method and…

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

Q: Which are the total interest expense in the statement of profit or loss?

A: Interest expense is the finance cost which is deducted from operating profit i.e. earnings before…

Q: provide some examples of items that would be adjusted directly against equity, rather than being…

A: Shareholder's equity:   The amount remaining after subtracting company long term and short term…

Q: what are the examples of Items that can  be adjusted directly against equity rather than including…

A: Profit or loss account is a revenue account, whereas the equity account is a capital account. Equity…

Q: Provide some example of items which would be adjusted directly against equity rather than being as…

A: Stockholders’ equity: The claims of owners on a company’s resources, after the liabilities are paid…

Q: what does an alternative reformulation of financial information mean?

A: Financial statement A financial statement refers to those which are prepared in order to ascertain a…

Q: How would a debit balance in Unrealized Gain (Loss) on Available-for-Sale Investments be reported in…

A: Available-for-sale securities: These are short-term or long-term investments in debt and equity…