All of the Following Are Not True Regarding the Fair

question 78

Multiple Choice

All of the following are not true regarding the Fair Value Adjustment - Trading account except

• A) the account is only adjusted at the end of the accounting period.
• B) a debit balance in the account is subtracted from the cost of the investments so that the investments are reported at fair value.
• C) the account is adjusted for the difference between the investments' fair value and cost.
• D) if the total cost of the securities is greater than the total fair value, the account will be credited.

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Definitions:

Journal Entry

Journal entry is the method by which financial transactions are recorded in an organization's accounting records, specifying the accounts affected and the direction (debit or credit) of the transaction.

Bank Statement

A monthly document provided by a bank detailing all transactions in an account, which can include deposits, withdrawals, service charges, and interest earned.

NSF Check

A check that a bank has declined to honor because the account on which it was drawn does not have sufficient funds.

EFT Deposit

Stands for Electronic Funds Transfer deposit, a method of transferring money directly from one bank account to another electronically.