Question

Unrealized Loss on Trading Investments a.is reported on the income statement in the operating expenses area. b.is reported on the balance sheet. c.is not significant enough to be reported. d.is reported on the income statement separately or as a part of Other Income and Expense.

Answer 1

Answer: D. is reported on the income statement separately, or as a part of Other Income and Expense, depending on its significance.

Explanation: Unrealized losses are losses that have been inputted on paper, but the corresponding transactions have not been completed. They are also known as paper loss, due to their being recorded on paper; and are changes in the value of assets or liabilities that have not yet been settled. They are reported on the income statement separately or as a part of other income and expense (accumulated comprehensive income), usually found in the equity section of the balance sheet.