Which of the Following Is True of Financial Assets

question 105

Multiple Choice

Which of the following is true of financial assets?

• A)Companies issue financial assets to earn revenue.
• B)Investors purchase financial assets to earn a return.
• C)The ownership of financial assets cannot be transferred.
• D)Investors purchase financial assets because they are virtually risk free.

---

Definitions:

Financial Treatment

The method or approach used in accounting to manage and report the financial aspects and transactions of a business.

Ownership

The right to possess property, whether tangible or intangible, and exercise control over it.

Valuation Allowance

A reserve created against the deferred tax asset due to uncertainty concerning its realization.

Unrealized Gain

Profit that comes from an investment that has increased in value but has not yet been sold by the investor, thus not resulting in actual income.