Which of the Following Is True of Trading Investments

question 143

Multiple Choice

Which of the following is true of trading investments?

• A)They are held for more than two years.
• B)They are generally recorded as long-term investments.
• C)They must be adjusted and reported at fair value at the end of each accounting period.
• D)They are always reported on the balance sheet at their historical cost.

---

Definitions:

Perpetual Inventory System

A process in accounting for inventory that instantly logs purchases or sales via computerized point-of-sale systems and enterprise asset management programs.

Journal Entry

A record in accounting that notes every financial transaction of a business in chronological order.

FOB Shipping Point

A shipping term indicating that the buyer assumes responsibility for the goods and the cost of transportation as soon as the goods leave the seller's premises.

Freight Costs

Expenses associated with transporting goods from one place to another, including the costs of shipping, handling, and insurance of goods during transit.