Question

In: Accounting

Trading securities are reported at _, and any changes from cost are reported as part of...

Trading securities are reported at _, and any changes from cost are reported as part of _.

A cost, net income

B fair value, net income

C cost, stockholders' equity

D fair value, stockholders' equity

Under the _ method, the balance in the stock investment is updated to reflect the investor's share of cash dividends received and proportionate share of net income or loss.

A cost

B equity

C consolidation

D debt

Solutions

Expert Solution

The correct option is (b) i.e. fair value, net income

Trading securities are reported at fair value and any changes from cost are reported as part of periodic net income.

The correct option is (b) i.e. equity

Under the equity method, the balance in the stock investment is updated to reflect the investor's share of cash dividends received and proportionate share of net income or loss.

ekkarill92 answered 2 years ago
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