18-24.The Purpose of an Option Is

question 19

Multiple Choice

18-24.The purpose of an option is:

• A) to exercise a lease on the property
• B) to be able to purchase the land at a future time
• C) to secure land without securing immediate financing
• D) both b and c

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Definitions:

Trading Securities

Investments in debt or equity securities bought and held primarily for selling them in the short term to generate income on short-term price differences.

Unrealized Gain or Loss

Refers to the increase or decrease in the value of investments that a company holds but has not yet sold, which affects the financial statements only when realized.

Income Statement

A financial report that shows a company's revenues, expenses, and net income over a specific period, highlighting its operating performance.

Equity Method

An accounting technique used for recording investments in other companies, where the investment is initially recorded at cost and adjusted for the investor's share of the investee's profits or losses.