The Fair Value Through Net Income Model Requires That

question 18

Multiple Choice

The fair value through net income model requires that

• A) investments are measured at fair value.
• B) transaction costs are expensed.
• C) investments are measured at fair value and transaction costs are capitalized.
• D) investments are measured at fair value and transaction costs are expensed.

Understand the purpose and components of the post-closing trial balance.

Comprehend the steps in the accounting cycle and their execution, including the timing and nature of adjusting and closing entries.

Recognize the differences between temporary and permanent accounts and their treatment in closing entries.

Calculate the net income or loss from income statements and understand its impact on ledger accounts after closing entries.

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Definitions:

Measurable

Capable of being quantified or precisely assessed.

Social Responsibility Pyramid

A framework suggesting that businesses are responsible to their stakeholders in a hierarchical manner, starting from economic, legal, ethical, to philanthropic responsibilities.

Milton Friedman

was an American economist known for his strong belief in free-market capitalism and for being a leading proponent of monetarism.

Economic Responsibility

Refers to the duty of organizations to make decisions that benefit the financial health of both the company and the wider economy.