Identify the classifications for non-influential investments in securities.What are the accounting basics for non-influential investments in securities, including acquisition, dividends earned, and disposition?
What will be an ideal response?
Non-influential investments in securities can be classified as: (1) trading, (2) held-to-
maturity, and (3) available-for-sale. Equity securities are recorded at their cost when acquired. Any cash dividends received are credited to Dividend Revenue and reported in the income statement. When the securities are sold, sale proceeds are compared with the cost, and any gain or loss is recorded. Trading securities are reported at fair value with a fair value adjustment to income. Available-for-sale securities are reported at fair value with a fair value adjustment to equity. There is no fair value adjustment for held-to-maturity securities.
You might also like to view...
An example of an external user of accounting information is the federal government
Indicate whether the statement is true or false
What are the three categories of business analytics?
What will be an ideal response?
Define design planning. How does it differ from operational planning?
What will be an ideal response?
According to the Transformational Leadership Theory, intellectual stimulation involves encouraging followers to question assumptions
a. True b. False Indicate whether the statement is true or false