Assume a company does not elect the fair value option for reporting financial assets. Realized gains from the sale of marketable
debt securities should be included in net income of the period of sale when the marketable debt securities portfolio of which they are a part is classified as a. Available-for-sale
b. Abailable-for-sale or Held-to-maturity
c. Held-to-maturity
d. Neither
The marketable debt securities portfolio of which they are a part is classified as Held to maturity.
Option: C
Explanation:
Debt securities (bonds) classified as held-to-maturity are reported at premium cost or cost benefit policy. Debt securities classified as available-for-sale or held to maturity are reported at fair value.Investments in market where sellers are not intended to sell the thing in the near term should be categorized as available-for-sale.
Unauthenticated gains and losses on available-for-sale securities should be reported as a different component of aggregate income. In international trade cost benefit hypothesis and sale security option more works.
