An Investment in Short-Term Equity Securities Should Be Charged to a Nominal

question 36

True/False

An investment in short-term equity securities should be charged to a nominal account since the investment is temporary.

---

Definitions:

Equivalent Amount

A sum of money that is equal in value to a different amount in another currency or under different conditions.

Present Value

The current value of a future amount of money or stream of cash flows, discounted at a particular interest rate.

Compounded Quarterly

A method of calculating interest where the interest is added to the principal four times a year, resulting in the interest from one quarter earning interest in the next.

Compounded Semi-annually

Interest calculation method where the interest is added to the principal amount after every six months, increasing the total amount on which future interest accruals are based.