USGAAP and IFRS Require Firms to Classify Marketable Securities That

question 105

Multiple Choice

U.S.GAAP and IFRS require firms to classify marketable securities that are neither debt securities held to maturity nor trading securities as _____.

• A)derivative securities
• B)noncurrent securities
• C)securities not available-for-sale
• D)securities available-for-sale
• E)marketing making securities

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Definitions:

Conservatism Principle

an accounting principle that guides companies to report lower values for assets and revenues, higher values for liabilities and expenses when in doubt, ensuring that financial statements do not overstate the company’s financial position.

Impairment Loss

The amount by which the carrying amount of an asset exceeds its recoverable amount, leading to a decrease in the asset's value on the balance sheet.

Carrying Value

The book value of assets and liabilities recorded on the financial statements, often differing from market value.

Extraordinary Item

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, requiring separate disclosure in financial statements for clarity.