Question

Which of the following statements is true about investments categorized as trading securities?

a. They are valued on the balance sheet at cost

. b. They can consist of debt, but not equity, securities.

c. They are purchased to be held to maturity.

d. Changes in market value are reflected in net income.

Answer 1

Investment that categorized as trading securities are:

1) Valued at the current fair market value

2) Purchased with a intention of sell in short term & to book a gain from that

3) can consist of equity, debt & other money market instruments.

4) Changes in there market value are to be adjusted in net income.

Hence Option D is correct

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