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

question 28

Multiple Choice

If the cost of an available-for-sale security exceeds its fair value by $29,000, 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 valuation allowance account that appears in the stockholders' equity section of the balance sheet.
• D)will show a debit to an unrealized gain or loss account that is deducted in the stockholders' equity section of the balance sheet.

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Definitions:

Anxiety Disorders

Anxiety disorders are a group of mental health disorders characterized by feelings of anxiety and fear that are strong enough to interfere with daily activities.

Global Assessment

An evaluative process that considers multiple aspects or dimensions of a subject, such as an individual's health, an organization's performance, or the state of the environment, to form a comprehensive overview.

Functioning

The capacity or ability of something or someone to operate or perform effectively.

Unspecified

This term indicates that certain details or aspects are not specified or determined.