Foley Corporation's trading portfolio at the end of the year is as follows: At the end of the year, Foley Corporation should

Question

Foley Corporation's trading portfolio at the end of the year is as follows:  At the end of the year, Foley Corporation should

Quizplus · Accepted Answer

Foley Corporation should set up a Market Adjustment account for the portfolio as a whole, rather than just for Stock B, as the market value of the entire portfolio has decreased. This will allow for proper tracking and adjustment of the portfolio's value. Choice C is incorrect as the Unrealized Gain or Loss-Income account is used to track changes in the value of securities that have not yet been sold, and as such, cannot be recognized until the securities are sold. Choice D is also incorrect as losses on trading securities should be reported as a separate line item on the income statement.

Foley Corporation's Trading Portfolio at the End of the Year