How Are Marketable Securities Valued on the Balance Sheet

question 27

Multiple Choice

How are marketable securities valued on the balance sheet?

• A) Historical cost.
• B) At cost or fair value depending on how the securities are classified.
• C) Market value.
• D) At fair value with the difference between cost and fair value reported as revenue.

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Definitions:

Gain or Loss

The financial outcome resulting from the sale of assets or securities, determined by the difference between the sale price and the original purchase price.

Intangible Assets

Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.

Long-Lived Assets

Assets that are expected to provide economic benefits to a company for a period longer than one year.

Physical Substance

An attribute indicating that an asset has tangible form and can be perceived by the senses.