The Year-End Adjusting Entry to Reflect an Increase in the Value

question 60

Multiple Choice

The year-end adjusting entry to reflect an increase in the value of trading securities includes a

• A)credit to Unrealized Gain on Short-Term Investments.
• B)credit to Short-Term Investments.
• C)credit to Allowance to Adjust Short-Term Investments to Market.
• D)credit to Realized Gain on Investments.

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Definitions:

Aging of Receivables Method

This is an accounting technique used to estimate uncollectible receivables by analyzing and classifying accounts receivable according to their age.

Accounts Receivable Turnover

A financial ratio that measures how many times a company can turn its accounts receivable into cash during a period.

Accounts Receivable Turnover

A financial metric that measures how many times a company can turn its accounts receivable into cash within a given period.

Adjusting Entry

A journal entry made at the end of an accounting period to update account balances before preparing financial statements, ensuring they reflect the true financial position.