Question: FASB Statement No. 115 is another example of the Boards emphasis on the balance sheet as contrasted with the income statement. As treasurer of Diamond

FASB Statement No. 115 is another example of the Board’s emphasis on the as contrasted with the income statement. As treasurer of Diamond Instrument, you desire to maximize income over the short run. Diamond has had excess cash, and you have chosen to invest it in both marketable debt and equity securities. What classification policy could you follow to maximize your investment’s impact on net income? How would you justify this policy to your auditors?

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