Galvan Corporation (GC)capitalized a $20,000 Automobile

question 72

Multiple Choice

Galvan Corporation (GC) capitalized a $20,000 automobile.Which of the following is true?

• A)GC recorded a liability for $20,000.
• B)GC recorded an asset for $20,000.
• C)GC recorded an expense for $20,000.
• D)GC recorded Contributed Capital for $20,000.

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Definitions:

Downside Risk

Refers to the potential loss in value of an investment or asset if the market conditions deteriorate.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Sell Shares

The act of offloading equity stakes in a company, usually in the form of stock, to raise capital or realize gains from investment.

Exercise Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset or security.