- CFA Exams
- CFA Level I Exam
- Study Session 5. Financial Reporting and Analysis (1)
- Reading 13. Intercorporate Investments
- Subject 2. Investments in Financial Assets
CFA Practice Question
How would securities held for the purpose of retiring long-term bonds be reported on a classified balance sheet?
A. They would be reported as current assets.
B. They would be reported as long-term investments.
C. They would be reported as a contra account to bonds payable.
Explanation: The securities should be classified in a manner consistent with the related debt, i.e., current or long term.
User Contributed Comments 3
| User | Comment |
|---|---|
| shasha | bond is long-term investment |
| EBIII | who tell you this? Bonds can mature in the next 24 hours. Holding a bond does not necessarily mean that it is a long term investment. |
| cbb1 | Description in question identifies it as long-term. |