In Recognizing a Decline in the Fair Value of Short-Term

question 199

Multiple Choice

In recognizing a decline in the fair value of short-term stock investments, an Unrealized Loss account is debited because

• A) management intends to realize this loss in the near future.
• B) the securities have not been sold.
• C) the stock market is volatile.
• D) management cannot determine the exact amount of the loss in value.

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Definitions:

Supervising

The act of overseeing and directing the work and performance of others, usually in a professional or work environment.

Transitive Inference

A classification skill in which a child can infer the relationship between two objects by understanding each object’s relationship to a third object.

Class Inclusion

Involves understanding hierarchical relationships among items.

Conservation

The principle that a physical quantity, such as number, mass, or volume, remains the same even when its appearance changes.