土豆妮

Which of the following securities would most likely be characterized as a held-to-maturity security?

A) Debt securities.

B) Debt or equity securities.

C) Equity securities.

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Only debt securities, that a company has a positive intent and ability to hold to maturity, can be characterized as a held-to-maturity security.

土豆妮

Accounting standards for intercorporate investments establish different categories of securities with distinct ways of treating them on the financial statements of the company. One category requires the securities to be carried at fair value on the balance sheet with unrealized gains and losses excluded from the income statement. This category of security classification is called debt:

A) and equity securities available-for-sale.

B) securities held-to-maturity.

C) and equity trading securities.

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If securities are designated as debt and equity securities available-for-sale they can be sold to meet the liquidity and other needs of the company. As such, the securities are to be carried at fair value on the balance sheet with unrealized gains and losses excluded from the income statement.