Which of the Following Is True Regarding Accounting for Investments

question 137

Multiple Choice

Which of the following is true regarding accounting for investments of permanent funds?

• A) Investments with determinable fair values must be reported at fair value.
• B) Gains and losses on investments would not be reported in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances until realized by sale.
• C) Both of the above are true.
• D) Neither of the above is true.

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Definitions:

Capital Budgeting

The process through which a company evaluates and selects long-term investments that are worth more than their cost to pursue.

Long-Term Projects

Long-term projects involve commitments or investments that span several years, focusing on achieving objectives that contribute to a company's growth or development.

New Ventures

Refers to the initiation of new business activities or startup companies.

Capital Improvements

Expenditures relating to the upgrade, enhancement, or expansion of physical assets, increasing their useful life or value.