In Recognizing a Decline in the Fair Value of Short-Term

question 199

Multiple Choice

In recognizing a decline in the fair value of short-term stock investments, an Unrealized Loss account is debited because

• A) management intends to realize this loss in the near future.
• B) the securities have not been sold.
• C) the stock market is volatile.
• D) management cannot determine the exact amount of the loss in value.

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Definitions:

Cash Payments

Transactions where payment for goods or services is made in currency or via banknotes rather than by cheque, credit card, or other electronic means.

Tender Of Payment

Offering of money or payment as satisfaction of a debt or obligation.

Reject

To refuse to accept, submit to, believe, or make use of something.

Required Amount

The specific quantity of something needed or mandated by regulations or agreements.