The Market Value of an Available-For-Sale Security Has Declined from the Last

question 140

Multiple Choice

The market value of an available-for-sale security has declined from the last carrying value. The journal entry to record this decline will include:

• A)a credit to the Allowance to Adjust Investment to Market.
• B)a credit to the Unrealized Gain on Investment.
• C)a debit to the Unrealized Loss on Investment.
• D)both A and C.

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Definitions:

Common Stock Account

An equity account that represents the ownership interests of common shareholders in a company.

Stated Value

A value assigned to a company's no-par value stock by the company’s board of directors.

Shares

Shares represent an ownership stake in a company or financial asset, distributing profits equally through dividends if any are declared.

Earnings Per Share

A measure of a company's profitability calculated as net income divided by the number of outstanding shares of its common stock.