In January 2017, Haddock Ltd

question 1

Multiple Choice

In January 2017, Haddock Ltd.had purchased an investment for $150,000.By December 31, 2017, the fair market value of that investment had increased by $20,000.Assuming this gain was included in the company's 2017 net income, which accounting method did Haddock use to account for this investment?

• A)cost
• B)fair value through other comprehensive income (FV-OCI)
• C)fair value through net income (FV-NI)
• D)equity

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Definitions:

Managerial Accounting Reports

Internal financial reports that provide managers with the necessary information to make informed business decisions, typically focused on future profitability and efficiency.

Subunits

Subunits refer to smaller, separately identifiable parts of a larger organization, which can be departments, divisions, or subsidiaries, each responsible for distinct functions or regions.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including balance sheet, income statement, and cash flow statement.

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction, particularly in the United States.