If the Cost of an Available-For-Sale Security Exceeds Its Fair

question 27

Multiple Choice

If the cost of an available-for-sale security exceeds its fair value by $40000 the entry to recognize the loss

• A) is not required since the share prices will likely rebound in the long run.
• B) will show a debit to an expense account.
• C) will show a credit to a contra-asset account that appears in the stockholders' equity section of the balance sheet.
• D) will show a debit to an unrealized loss account that is deducted in the stockholders' equity section of the balance sheet.

---

Definitions:

Anterior Pituitary

The front portion of the pituitary gland, a pea-sized organ at the base of the brain, which produces and releases several hormones that regulate various bodily functions.

Testosterone

A steroid hormone produced primarily in the testes of males and the ovaries of females, important for the development of male physical characteristics and other biological processes.

Thyroid Hormone

Hormones produced by the thyroid gland that regulate metabolism, energy generation, and overall growth and development.

Graves Disease

Disease associated with the over-production of T3 and T4 by the thyroid; caused by antibodies that interact with TSH receptors in the thyroid.