All of the following statements regarding accounting for trading debt securities under U.S.GAAP are true except:
A)The entire portfolio of trading securities is reported at fair value.
B)An unrealized gain or loss from a change in fair value is reported in the income statement.
C)An unrealized gain or loss is recorded with an adjusting entry when the securities are sold.
D)An unrealized gain or loss is recorded with an adjusting entry at the end of each period.
E)Unrealized gains and losses are recorded in a temporary account that is closed to Income Summary at the end of each period.

Question

Quizplus · Accepted Answer

An unrealized gain or loss is not recorded with an adjusting entry when the securities are sold. Instead, a realized gain or loss is recognized at the time of sale.

All of the Following Statements Regarding Accounting for Trading Debt