Which of the Following Statements Is INCORRECT Regarding Fair Value

question 34

Multiple Choice

Which of the following statements is INCORRECT regarding fair value adjustments for investments?

• A) Both FV-NI investments and FV-OCI investments could include equity investments or investments in debt securities.
• B) FV-OCI investments exclude debt securities.
• C) At each period end, an estimate is made of the fair value of both FV-NI and FV-OCI investments.
• D) An adjusting entry is required to record a holding gain or loss on FV-NI investments.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that represents the amount of receivables a company does not expect to actually collect.

Accounts Receivable

Amounts due to a company from its customers or clients for services rendered or goods delivered, but not yet paid for.

Finance Charge

A fee representing the cost of credit or the cost of borrowing, typically detailed in the terms of a loan or credit agreement.

Accounts Receivable

Money owed to a business by its customers for products or services delivered or used but not yet paid for.