1. All of the following are true for Available-for-sale equity securities except:

A) Are reported at market value on the balance sheet.

B) May earn dividends that are reported in that year's income statement.

C) May be classified as either short-term or long-term securities.

D) Are recorded at cost when acquired.

E) Are actively managed like Trading Securities.

2. On March 15, Alan Company purchased 10,000 shares of Cameo Corp. stock for $35,000. The investment is classified as available-for-sale securities. On June 30, the stock had a fair value of $34,000. Alan should do which of the following?

A) Record an increase to the Unrealized LossEquity account.

B) Report a decrease in the Gain on Sale of Investment income statement account.

C) Record an increase to the Unrealized GainIncome account.

D) Record a decrease to the Fair value Adjustment-AFS account.

E) Report an increase in the asset section of the balance sheet.