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djwashington1978
Apr 19, 2024 3:33 PM UTC
Question

Unrealized Gains/losses on trading debt securities

Hello:

 

I am trying to debit my trade securities accounts (current assets on balance sheet) and credit my unrealized gains/loss account (income statement - other comp income), and when I do this, I get a correct unrealized gain account, but an increase in my trade security account. And vice versa. 

Am I missing a step? 

1 reply

Rainflurry
Rainflurry
Apr 19, 2024 10:26 PM UTC

@djwashington1978 

 

That's correct.  Debits increases assets and credits increase income (equity) so you should see an increase in both the trade securities asset and the unrealized gain other income account.  Were you expecting something different?  Double-entry accounting must always keep the balance sheet balanced (Assets + Liabilities + Equity).  You wouldn't have income unless the asset increased by a corresponding amount.   

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