At January 1,2014,a Company Had a Net Valuation Allowance Account

question 32

Multiple Choice

At January 1,2014,a company had a net valuation allowance account credit balance for investments in securities available-for-sale of $20,000.At December 31,2014,the total cost of the relevant portfolio was $300,000,and total market value was $275,000.The entry required on December 31,2014,would reflect a

• A) $5,000 decrease in net income.
• B) $25,000 decrease in net income.
• C) credit of $5,000 to the valuation allowance account.
• D) debit of $25,000 to the unrealized loss account.

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Definitions:

F.O.B.

F.O.B. (Free On Board) is a shipping term indicating that the seller bears delivery expenses and risks until the goods reach the specified point, at which the buyer takes over.

Dishwashers

Appliances designed for automatically cleaning dishware, cookware, and cutlery.

Washing Machines

Appliances designed for cleaning laundry by combining water, detergent, and mechanical action.

Party In Breach

The individual or entity that fails to fulfill their contractual obligations, thus violating the agreement.