Which of the Following Is True of the Fair Value

question 120

Multiple Choice

Which of the following is true of the Fair Value Adjustment account for trading investments?

• A)It will always have a credit balance.
• B)It will always have a debit balance.
• C)It is considered as an adjunct account if it has a credit balance.
• D)It is considered as an adjunct account if it has a debit balance.

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Definitions:

Usury

The practice of charging excessively high interest rates on loans, typically beyond the legal limit.

Maximum Interest Rate

The highest rate of interest that can be charged on a loan, as dictated by law or agreement.

Contractual Duty

An obligation either to do or refrain from doing something, as set forth in a contract.

Unforeseen Circumstances

Situations or events that could not have been expected or planned for, often affecting the ability to fulfill contracts or obligations.