True or False: Marketable Securities are classified as unrealized gains on the balance sheet.

Marketable securities are classified as assets on the balance sheet and are generally reported at fair value, which means that their valuation is based on current market prices. If the fair value of these securities is greater than their cost, this results in an unrealized gain. However, unrealized gains are not directly reflected in the equity section of the balance sheet until realized through the sale of the securities. Instead, they may be reflected in the comprehensive income section, depending on the classification of the securities.

Therefore, the statement that marketable securities are classified as unrealized gains on the balance sheet is misleading, as unrealized gains do not have a direct line item on the balance sheet. They contribute to the overall equity through accumulated other comprehensive income, but they are not labeled explicitly as "unrealized gains."

This context clarifies why the correct answer is not simply true, but rather indicates a more nuanced understanding of how these securities are presented in financial statements. The answer should be considered false, given that unrealized gains are not classified as such directly on the balance sheet, as their recognition depends on various factors, including whether they are sold or maintained in the portfolio.