A company has a long-term investment in available-for-sale securities.The Unrealized Gain on (long-term)Investment in Available-for-Sale Securities is reported as:

Question

Quizplus · Accepted Answer

The Unrealized Gain on (long-term) Investment in Available-for-Sale Securities represents an unrealized gain on the value of the investment, which has not yet been sold. As per the accounting rules, such gains are reported as Other Comprehensive Income in the Statement of Comprehensive Income. Additionally, such unrealized gains are recorded in Accumulated Other Comprehensive Income on the balance sheet. Hence, both options A and C are correct, making option D the best choice. Option B is incorrect as it refers to gains that are realized and reported in the income statement.

A Company Has a Long-Term Investment in Available-For-Sale Securities