The primary difference in accounting for available-for-sale investments in stock and accounting for trading investments in stock is which of the following?
A)Measuring the market value of the long-term and short-term investment portfolios on the balance sheet.
B)Determination of the acquisition cost.
C)Where the unrealized holding loss or gain on investments is reported within the financial statements.
D)Determination of the unrealized holding gain or loss.

Question

Quizplus · Accepted Answer

Available-for-sale security unrealized gains and losses are reported on the balance within stockholders' equity; whereas trading security unrealized gains and losses are reported on the income statement.

The Primary Difference in Accounting for Available-For-Sale Investments in Stock