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True or false: the only difference between trading securities account and the AFS securities account upon purchase is the account the sale affects?

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Final answer:

The statement is false. There are differences between a trading securities account and an AFS securities account aside from the account affected by the sale.

Step-by-step explanation:

The statement is false. There are differences between a trading securities account and an AFS securities account aside from the account affected by the sale. There are several differences between a trading securities account and an Available-for-Sale (AFS) securities account aside from the account affected by the sale. In a trading securities account, the securities are bought with the intention of selling them in the near term for a profit.

The changes in the fair value of trading securities are recorded in the income statement. On the other hand, an AFS securities account is used for securities that are not intended for immediate sale. The changes in the fair value of AFS securities are recorded in the comprehensive income statement.

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