Which of the Following Is True of the Accounting Entries

question 48

Multiple Choice

Which of the following is true of the accounting entries for debt securities?

• A)The receipt of interest revenue is recorded with a debit to Interest Revenue and a credit to Cash.
• B)Investments in debt securities are recorded at cost, including any brokerage fees paid.
• C)The receipt of interest revenue is recorded with a debit to Cash and a credit to Long-term Securities-Held-to-Maturity.
• D)Debt securities disposed of at maturity are recorded with a debit to the Short-term or Long-term Investments account and a credit to Cash.

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Definitions:

Overall Product

The complete final product resulting from a manufacturing or production process.

Cost-Volume-Profit Chart

A graphical representation that shows how changes in cost, sales volume, and price affect a company's profit.

Profit-Volume Chart

A graphical representation that shows the relationship between a company's profits and its volume of sales, highlighting the break-even point.

Operating Profit

Income generated from core business operations, excluding revenue and expenses from non-operating activities.