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.