39 - Trading Investments Held for short time and then sold...

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Codes of Ethics Most companies have a code of ethics Owners and managers must set an ethical tone as well The accounting profession is expected to maintain higher standards AICPA Code of Professional Conduct Standards of Ethical Conduct for Management Accountants Ethical Issues in Accounting Pressure often exists for managers to reach earnings or stock price goals Earnings can be manipulated by Understating expenses Overstating revenues Use Framework for Making Ethical Judgments Framework for Ethical Judgments Identify the ethical issue Specify the alternatives Assess the possible outcomes Make the decision Accounting for Short-Term Investments Also called marketable securities Held for one year or less Most liquid asset other than cash Placed into three categories:
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Unformatted text preview: Trading Investments Held for short time and then sold Gain or loss recorded Dividend revenue may also be received At year-end, trading investments are adjusted to equal their market value Results in an unrealized gain or loss Unrealized Gains & Losses Difference between market price and cost of investment at year-end Unrealized investment has not been sold Realized vs. Unrealized Realized Investment sold to third party Gain or loss = difference between selling price and cost Word realized usually dropped from title Unrealized Company still owns investment Gain or loss = difference between market value and cost Word unrealized is kept in account title...
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39 - Trading Investments Held for short time and then sold...

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