Unrealized Gains or Losses on Available-For-Sale Investments Occur When a Company

question 15

Multiple Choice

Unrealized gains or losses on available-for-sale investments occur when a company adjusts the investment to ________.

• A)fair value but has not yet disposed of the asset
• B)fair value when an asset is disposed
• C)average value but has not yet disposed of the asset
• D)average value when an asset is disposed

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Definitions:

Drawing Account

An account used to record withdrawals of cash or other assets from a business by the owner for personal use.

Final Entries

Journal entries made at the end of an accounting period to prepare accounts for the next period or close the books.

Journalizing

The process of recording a transaction in the journal.

Adjustments and Closing Entries

The journal entries made at the end of an accounting period to allocate income and expenditures to the appropriate periods.