Fsa 28 the fair value adjustment account can only

FSA
28. The Fair Value Adjustment account can only have a credit balance or a zero balance.
Reporting
H-7
29. Unrealized gains and losses are recognized on trading securities.
Reporting
30. Trading securities are valued on the balance sheet at market value.
Reporting
31. Unrealized gains and losses on available-for-sale securities are reported on the income
statement.
Reporting
32. The valuation of available-for-sale securities is similar to the procedures followed for
trading securities, except that changes in fair value are not recognized in current income.
FSA
FOR INSTRUCTOR USE ONLY

Test Bank for Financial Accounting: Tools for Business Decision Making, Eighth Edition
33. An unrealized gain or loss on trading securities is reported as a separate component of
stockholders' equity.
Reporting
34. For available-for-sale securities, the unrealized gain or loss account is carried forward to
future periods.
Reporting
35. The account Fair Value Adjustment-Trading appears as a contra account in the income
statement.