Which of the Following Is True of Trading Investments

question 143

Multiple Choice

Which of the following is true of trading investments?

• A)They are held for more than two years.
• B)They are generally recorded as long-term investments.
• C)They must be adjusted and reported at fair value at the end of each accounting period.
• D)They are always reported on the balance sheet at their historical cost.

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Definitions:

Unearned Rent

Income received by a property owner for which the services (use of property) have not yet been provided.

Expense Accounts

Accounts used to track money spent or costs incurred in a business's operational activities.

Asset Accounts

Accounts that track the value of a company's economic resources, or assets, such as cash, inventory, property, and equipment.

Accrual Basis

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.