At the End of Its First Year, the Securities Portfolio

question 128

Multiple Choice

At the end of its first year, the securities portfolio consisted of the following common stocks, all of which represent less than 20% ownership. The unrealized loss to be recognized under the fair value method is

• A)$4,200.
• B)$8,200.
• C)$4,600.
• D)$4,000.

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Definitions:

Revenue Recognition

An accounting principle that outlines the specific conditions under which revenue is recognized and recorded.

Adjusting Entry

An adjusting entry is a journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the correct period.

Services Performed

The provision of work or assistance by a business or individual to another party, often measured in terms of time or deliverables completed.

Revenue Recognition Principle

An accounting principle that dictates the specific conditions under which revenue is recognized or accounted for.