If the Cost of a Trading Investment Exceeds Its Fair

question 54

Multiple Choice

If the cost of a trading investment exceeds its fair value by $40,000, the entry to recognize the loss

• A) is not required since the share prices will likely rebound in the long run.
• B) will show a debit to an expense account in the operating section of the income statement.
• C) will show a credit to a contra-asset account that appears in the shareholders' equity section of the balance sheet.
• D) will show a debit to an loss account that appears in the other expenses section of the income statement.

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Discretionary Fiscal Policy

Government policy actions that involve changing government spending and taxation in order to influence the economy.

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The set of laws and regulations that determine how taxes are collected, managed, and utilized by the government.