Unrealized Gains or Losses on Available-For-Sale Securities Occur When a Company

question 127

Multiple Choice

Unrealized gains or losses on available-for-sale securities occur when a company:

• A)adjusts an asset to fair value but has not yet disposed of the asset.
• B)adjusts an asset to fair value when an asset is disposed.
• C)adjusts an asset to average value but has not yet disposed of the asset.
• D)adjusts an asset to average value when an asset is disposed.

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Definitions:

Fixed Overhead Volume

refers to the portion of fixed overhead costs that is associated with the production volume, used in calculating efficiency and profitability.

Standard Machine-Hours

A measure used in manufacturing to allocate costs to products based on the estimated number of hours the machinery is used.

Actual Output

Actual output is the quantity of finished goods or services produced by a company in a specific period.

Overapplied

A situation in cost accounting where the allocated manufacturing overhead for a period exceeds the actual manufacturing overhead costs incurred.