Short-Term Investments in Held-To-Maturity Debt Securities Are Accounted for Using

question 30

Multiple Choice

Short-term investments in held-to-maturity debt securities are accounted for using the:

• A)Fair value method with fair value adjustment to income.
• B)Fair value method with fair value adjustment to equity.
• C)Cost method with amortization.
• D)Cost method without amortization.
• E)Equity method.

---

Definitions:

Leased Equipment

Assets obtained for use by leasing rather than purchasing, allowing companies to use equipment without owning it.

Depreciation Expense

The allocated amount of the cost of an asset expensed each period over its useful life, reflecting wear and tear or obsolescence.

Rent Expense

Rent Expense is the cost incurred by a company or individual for the use of a property or equipment.

Capital Lease

A lease agreement that is classified as a purchase of an asset for accounting purposes, as it meets specific criteria set out in accounting standards.