The adjusting entry for investments at fair value through other comprehensive income contains a credit to Investments for $651. The income statement will reflect:
A) investment of $651
B) revenue of $651
C) other comprehensive income/loss of $651
D) nothing, because gain/loss is not reported on the income statement

Question

Quizplus · Accepted Answer

The adjusting entry for investments at fair value through other comprehensive income includes a credit to Investments, which means that the investment has increased in value. However, this increase is not considered revenue or gain in the traditional sense, as it is not related to the company's primary business operations. Instead, it is reported as other comprehensive income/loss on the income statement. Therefore, the best choice is C.

The Adjusting Entry for Investments at Fair Value Through Other