Which One of the Following Must Be Met Prior to Classifying

question 39

Multiple Choice

Which one of the following must be met prior to classifying an investment as current?

• A)It must be an equity security accounted for under the equity method.
• B)The percentage of ownership must be greater than 50%.
• C)The investment must be readily marketable.
• D)Management must intend to hold the investment for an undetermined time period.

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Definitions:

Covenants Not to Compete

Agreements often included in employment contracts that restrict an employee's ability to engage in business activities that compete with their employer after the employment ends.

Sale of Business

The process or transaction in which ownership of a business is transferred from one party to another.

Breach of Contract

The violation of any terms or conditions in a contract without legal justification.

Valid License

An official permission or permit that meets all legal requirements to engage in a particular activity or profession.