Final answer:
Trading securities are reported as current assets, available-for-sale securities can be found in both current and non-current asset sections, and held-to-maturity securities are listed as non-current assets.
Step-by-step explanation:
Trading securities, available-for-sale securities, and held-to-maturity securities are reported on the asset side of the balance sheet. The placement of these securities on the balance sheet reflects their nature as short-term or long-term assets. Trading securities are reported as current assets because they are meant to be sold in the short term. Available-for-sale securities can be either short or long-term assets depending on the company’s intention, and hence can appear in both the current and non-current section of assets. Lastly, held-to-maturity securities are reported as non-current assets since they represent long-term investments where the company has the intent and ability to hold the security to its maturity date.
On a bank’s T-account, as depicted in various figures such as Figure 14.5, these securities, alongside other financial instruments such as loans and reserves, form part of the financial instruments held by the bank. They are differentiated by their intended holding period and liquidity characteristics. The T-account reflects the assets, on one side, which for a bank includes its reserves and the various types of securities it holds or has invested in, while the liabilities and net worth are reported on the opposite side.