BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If a company wants to increase its reported income by manipulating its investment accounts, which should it do?
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Sell its “winner” trading securities and hold its “loser” trading securities.
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Hold its “winner” trading securities and sell its “loser” trading securities.
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Sell its “winner” available-for-sale securities and hold its “loser” available-for-sale securities.
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Hold its “winner” available-for-sale securities and sell its “loser” available-for-sale securities.
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Explanation:
Detailed explanation-1: -Offsetting gains with losses “Selling ‘down’ investments at a loss-known as tax-loss harvesting-and claiming the loss on your tax return, could help offset what you owe from your sale of better-performing stocks.”
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