An unrealized loss on available-for-sale securities is
A)reported under Other Expenses and Losses in the income statement.
B)closed-out at the end of the accounting period.
C)reported as a separate component of stockholders' equity.
D)deducted from the cost of the investment.

Question

Quizplus · Accepted Answer

An unrealized loss on available-for-sale securities is reported as a separate component of stockholders' equity on the balance sheet. This is because available-for-sale securities are considered temporary investments, and any unrealized gains or losses are not immediately recognized in the income statement. Instead, they are reported in the equity section of the balance sheet as a component of comprehensive income.

An Unrealized Loss on Available-For-Sale Securities Is