A Subsidiary Account for Temporary Investments

question 19

Multiple Choice

A subsidiary account for temporary investments:

• A)is the account reported on the balance sheet.
• B)contains the details of each individual investment.
• C)is the summary account of all of the investments.
• D)is where the dividend and income revenue from the investment is recorded.

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Definitions:

Risk Averse

Describing individuals or entities that prefer to avoid risk and would rather choose an alternative with a more certain but possibly lower return, than an option with a higher but uncertain return.

Utility Function

A mathematical representation that relates an individual’s consumption bundle to the level of satisfaction or utility derived from it.

Marginal Utility

The additional satisfaction or utility gained from consuming or using one more unit of a good or service.

Interest Rate

The percentage of a sum of money charged for its use, which can be seen as the cost of borrowing money or the return on saving.