Which type of securities owned by a company would be those that the company intends to sell within a short period of time in order to generate profits from selling them for more than the price at which they were purchased?

a) held-to-maturity securities

b) trading securities

c) profit securities

d) none of the above

b:

Which of the following is the correct way to estimate the uncollectible allowance based on the percentage-of-sales method?

a) The percentage of total outstanding accounts receivable to total sales.

b) The percentage of total sales to credit sales.

c) The percentage of uncollectible accounts receivable to total sales.

c:

Both trading securities and available-for-sale securities are reported on the balance sheet at fair value; which of the following are the correct statements regarding the reporting of unrealized holding gains and/or losses related to these two types of securities?

a) Unrealized holding gains/losses for trading securities are reported on the income statement as part of net income; those gains/losses related to available-for-sale securities are reported on the balance sheet as a component of shareholders' equity.

b) Unrealized holding gains/losses for trading securities are reported on the balance sheet as a component of shareholders' equity; those gains/losses related to available-for-sale securities are reported on the income statement as part of net income.

c) Unrealized holding gains/losses for both trading securities and available-for-sale securities are reported on the income statement as part of net income.