A Credit Balance in the Account Allowance to Adjust Long-Term

question 35

Multiple Choice

A credit balance in the account Allowance to Adjust Long-Term Investments to Market is disclosed in the financial statements as a

• A) contra account in the stockholders' equity section of the balance sheet.
• B) contra account to Long-Term Investments.
• C) note to the financial statements.
• D) liability.

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Definitions:

Unfavorable

A term used to describe outcomes or variances that negatively impact a business financially or operationally.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standardized expected quantity, valued at the standard cost per unit.

Direct Materials

Raw materials that are directly traceable to the production of a specific product and are significant in cost.

Favorable

A term usually used in finance and accounting to describe results that are better than anticipated or that result in a benefit.