debt vs equity security
Not what you're looking for?
Distinguish between the accounting treatment for available for sale equity securities and trading equity securities with example.
Distinguish between a debt security and an equity security.
What purpose does the variety in bond features serve
Identify and explain the three types of classifications for invest in debt securities
Purchase this Solution
Solution Summary
debt vs equity security is discussed very comprehensively in this explanation..
Solution Preview
Distinguish between the accounting treatments for available for sale equity securities and trading equity securities with example
The available for sale equity/securities are treated in accounting when the equity/securities are actually sold in the market. For instance, if 10,000 shares of $1 par are sold for cash and the company will receive $10,000, the sale of the stock is recorded by debiting cash and increasing common stock by $10,000.
On the other hand trading equity securities are investments that were made with the intent of reselling them. Such investments are treated as highly liquid and appear in the balance sheet as current assets. These have to be reported at fair market value and the changes in the value are measured and included in the operating income of each period. For instance, if the is a decline in the value by $500 during the year this 'loss' will be reflected both in the operating income as well as the decline of the ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
Recent Feedback
- "I read your comments, and thank you for this feedback. Do I need to find other studies that applied this methodology Ive used? That's where I'm stuck at."
- "Thank you kindly sir. "
- "Excellent and well explained. --Thank you kindly. "
- "Awesome notes. I appreciate you."
- "I have the follow-up project and I will assign that to you very soon. "
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.