If You Buy Stock Certificates and Keep Them at the Brokerage

question 35

Multiple Choice

If you buy stock certificates and keep them at the brokerage firm rather than taking personal possession of them, your stock is in:

• A)street name
• B)a short sale
• C)a limit order
• D)none of the above

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Definitions:

GAAP

A set of widely adhered to accounting norms and standards utilized for financial reporting, known as Generally Accepted Accounting Principles.

Capital Lease

A lease agreement that grants a lessee the rights similar to ownership of the asset, typically for a considerable period of the asset's life.

Operating Lease

A leasing agreement allowing the use of an asset without ownership, typically with shorter terms than a finance lease.

FASB/IASB Exposure Draft

A draft report proposed by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) for public comment on proposed changes to accounting standards.