Trading Securities definitions Flashcards
Trading Securities definitions
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Trading Securities Short-term investments classified as current assets, intended for active buying and selling to profit from price changes. Fair Value Current market price at which an asset could be bought or sold, used for subsequent measurement of investments. Unrealized Gain Increase in investment value not yet sold, reported on the income statement and affecting equity. Unrealized Loss Decrease in investment value not yet sold, shown on the income statement and reducing equity. Realized Gain Profit recognized when an investment is sold for more than its book value at last revaluation. Realized Loss Loss recognized when an investment is sold for less than its book value at last revaluation. Dividend Revenue Income received from holding shares, classified as non-operating and reported separately on the income statement. Current Asset Resource expected to be converted to cash or used within one year, including trading securities. Income Statement Financial report where unrealized and realized gains or losses from trading securities are presented. Journal Entry Accounting record documenting transactions such as purchases, sales, and value adjustments of investments. Book Value Carrying amount of an investment on the balance sheet after adjustments for fair value changes. Non-Operating Income Earnings from activities outside a company's main business, such as dividend revenue and investment gains. Revaluation Process of updating the recorded value of an investment to reflect current fair value at reporting dates. Equity Owner's residual interest in assets, increased by gains and decreased by losses from trading securities. T Account Visual tool used to track increases and decreases in accounts like investments and unrealized gains or losses.
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