If the Value of a Stock You Bought on Margin

question 9

True/False

If the value of a stock you bought on margin decreases to approximately 60 percent of its original price, you will receive a margin call from the brokerage firm.

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Definitions:

Notes Receivables

Written promises for amounts to be received, typically including interest, indicating that another party owes the business money.

Contra Asset Account

An account offset against an asset account on the balance sheet.

Allowance for Doubtful Accounts

An accounting provision that represents a company's estimate of invoices that will not be paid by customers.

Aging of Accounts Receivable

A method of categorizing accounts receivable based on how long they have been outstanding.