Which of the Following Is Not True Regarding Debt and Share

question 1

Multiple Choice

Which of the following is not true regarding debt and share investments?

• A)All trading securities are reported as fair value through profit or loss securities.
• B)A company can choose the FVPL designation when the security is initially purchased and then later change the designation to cost.
• C)Available-for-sale securities can be reported at fair value if the company elects this option when the security is initially purchased.
• D)Debt securities which the holder has the intent and ability to hold to maturity can be reported at fair value if the company elects this option when the security is initially purchased.

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Definitions:

Organizational Flexibility

The ability of a company or organization to adapt quickly to changes in its environment, including market trends, technologies, and internal dynamics.

Limited Liability

A legal structure where an individual's financial risk is limited to a fixed amount, typically the value of their investment in a company.

Perpetual Existence

A term used to describe a company's ability to continue operating indefinitely unless it decides to terminate.

Sole Proprietorship

A business owned and operated by a single individual, with no distinction between the business and owner legally or financially.