State and Local Governments Often Invest Liquid Assets on a Short-Term

State and local governments often invest liquid assets on a short-term or long-term basis for income and capital gains. Which statement best describes the reporting for these investments, per SGAS 31?

A) Investments are classified as trading or held to maturity. Trading securities are reported at market value, with changes in value reported in the appropriate operating statement. Held to maturity investments are reported at cost.
B) Investments are reported at market value, with changes in value accumulated in a contra-asset account, and the net balance is reported at cost.
C) Investments are reported at market value, with changes in value reported in the appropriate operating statement.
D) Investments are reported at cost. Any gain or loss is reported when the investments are liquidated.