Which of the following statements is correct?
A)Any unrealized holding gain or loss on debt investments in trading securities is reported on the income statement.
B)Any unrealized holding gain or loss on debt investments in available-for-sale securities is reported on the income statement.
C)All unrealized gains and losses on debt investments are reported on the income statement regardless of the method used to account for the investment.
D)All unrealized holding gains and losses on debt investments are reported as a component of Other Comprehensive Income regardless of the method used to account for the investment.

Question

Quizplus · Accepted Answer

Unrealized holding gains or losses on debt investments classified as trading securities are reported on the income statement. This is because trading securities are held primarily for sale in the near term, and their fair value changes are recognized in earnings to reflect the current market conditions.

Which of the Following Statements Is Correct