Ryan Corporation purchased 10,000 shares of Acme Stock.It plans to hold them for a short time and then sell them at a gain.It should classify these securities as ________.

Question

Quizplus · Accepted Answer

The classification of securities depends on the company's intent and purpose for holding them. Since Ryan Corporation plans to hold the Acme Stock for a short time and sell them for a gain, they should be classified as trading securities. Trading securities are held for the purpose of generating profits through short-term buying and selling activities. Available-for-sale securities and held-to-maturity securities are held for different purposes and thus have different classification criteria. Minority securities are not a recognized classification of securities.

Ryan Corporation Purchased 10,000 Shares of Acme Stock