The Process of Allocating the Original Cost of an Investment

question 58

Multiple Choice

The process of allocating the original cost of an investment over the years of use is known as _______.

• A)interest
• B)balance
• C)depreciation
• D)amortization

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Definitions:

Fair Value

An estimate of the market value of an asset or liability, based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership share in a corporation.

Journal Entries

The recordings of financial transactions in the bookkeeping system of a business, which include the debits and credits affecting the company's accounts.

Par Value

The nominal or face value of a share of stock as designated by the issuing corporation, playing a role in legal capital requirements.