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Available for Sale (AFS) – Objective Questions

Objective Questions

1. AFS securities are debt or equity investments that will be held
a. Till maturity.
b. For a predefined period.
c. Only till the current financial year.
d. For an indefinite period of time.
e. None of the above.

2. The unrealized gains/losses for AFS securities are
a. Recorded as an adjustment to equity on the balance sheet.
b. Not recorded in the balance sheet.
c. Recorded as earnings in P&L for the current period.
d. Both a and c.

3. When there is a permanent impairment to the value of the securities held as available-for-sale, such permanent impairment should be recognized as
a. Mark-to-market.
b. Current liabilities.
c. Income.
d. Accrued expense.
e. Cost.

4. For AFS securities, cost of sales is arrived at by which of the following methods?
a. Weighted average method.
b. FIFO.
c. LIFO.
d. All of the above methods.
e. None of the above methods.

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