Trading Securities Purchased for $400,000 Were Valued at $410,000 at the End

question 21

Multiple Choice

Trading securities purchased for $400,000 were valued at $410,000 at the end of the year. The adjusting entry to record this difference included a credit to:

• A)Retained Earnings.
• B)Unrealized Gain on Investments.
• C)Short-term Investments.
• D)none of the accounts. No adjusting entry is required.

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Definitions:

Overhead Variances

Differences between the actual overhead costs incurred and the overhead costs that were budgeted or expected.

Fixed

A financial term referring to costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable

Refers to a quantity that can change or vary over time or based on certain conditions.

Period

A duration of time identified for specific accounting or financial reporting purposes.