If a Trading Investment in Bonds Is Sold One Month

question 84

Multiple Choice

If a trading investment in bonds is sold one month after its value was adjusted at year end, the investment account is

• A)debited for the carrying amount of the bonds at the sale date.
• B)credited for the cost of the bonds at the sale date.
• C)credited for the carrying amount of the bonds at the sale date.
• D)debited for the cost of the bonds at the sale date.

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Definitions:

Balance Sheet

A balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, giving a snapshot of its financial condition.

Statement

A formal document summarizing the financial position or performance of an entity, such as an income statement or balance sheet.

Operating Activity

Activities directly related to the primary business operations of a company, including production, distribution, and sales of goods and services.

Payment Of Dividends

The distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional shares.