For trading securities, unrealized holding gains and losses are included in earnings:

Question

Quizplus · Accepted Answer

Unrealized holding gains and losses on trading securities are included in earnings on each reporting date. This is because these securities are bought and held for the purpose of selling them in the short term, so any fluctuations in their value are considered part of the company's current income. Option A is incorrect because it implies that unrealized gains and losses are only recognized at the end of the fiscal year, which is not accurate for trading securities. Option C and D are also incorrect as they are not relevant to the accounting treatment of unrealized gains and losses on trading securities.

For Trading Securities, Unrealized Holding Gains and Losses Are Included