The Fair Value Adjustment Account

question 147

Multiple Choice

The Fair Value Adjustment account

• A) is set up for each security in the company's portfolio.
• B) relates to the entire portfolio of securities held by the company.
• C) is closed at the end of each accounting period.
• D) appears on the income statement as Other Expenses and Losses.

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Definitions:

Preferred Stock

A type of equity security that usually provides a fixed dividend prior to any dividend payments to common stockholders.

Treasury Stock

Shares of a company's own stock that it has repurchased or never issued to the public.

Asset Investment

The allocation of resources into physical or financial assets with the expectation of generating future returns.

Acquisitions

The process by which a company buys most or all of another firm's shares in order to take control.