When an Investment in a Held-To-Maturity Security Is Transferred to an Available-For-Sale

question 36

Multiple Choice

When an investment in a held-to-maturity security is transferred to an available-for-sale security, the carrying value assigned to the available-for-sale security should be

• A) its original cost.
• B) its fair value at the date of the transfer.
• C) the lower of its original cost or its fair value at the date of the transfer.
• D) the higher of its original cost or its fair value at the date of the transfer.

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Definitions:

Product Line Extension

A strategy where a company introduces additional items in the same product category under the same brand name to increase variety and reach.

Safety-Coated

refers to items that have been covered with a material to reduce or eliminate the risk of harm or injury.

Extra-Strength

Referring to a product or medication designed with a higher potency or effectiveness compared to the regular strength.

Brand Extension

A strategy where a company uses an existing brand name to launch a product in a different category, leveraging the brand's equity to enter new markets.