Final answer:
The false statement about trading securities is that unrealized holding gains and losses on these securities are not included in net income. Trading securities are recorded at fair value and intended to be sold in the near future, and unrealized gains and losses do affect the net income because they are included in the income statement.
Step-by-step explanation:
The statement that is false about trading securities is the assumption that unrealized holding gains and losses on trading securities are included in the net income of the income statement. Trading securities are indeed carried at fair value in the balance sheet, and the investment account is adjusted to reflect this fair value. Moreover, it's true that trading securities are typically intended for sale in the near future. However, the unrealized gains and losses are reported in the income statement, which impacts net income, because this reflects the daily fluctuations in the fair value of these securities and their potential impact on the financial performance of the company.