The Mark-To-Market Adjustment

question 99

Multiple Choice

The mark-to-market adjustment:

• A) Affects both the balance sheet and the current period income statement.
• B) Is not made when the current market value of investments in marketable securities is higher than original cost.
• C) May result in either a gain or a loss to be reported in the current period income statement.
• D) Represents a departure from the cost principle.

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Definitions:

Economic Rents

Earnings in excess of the minimum amount required to keep a resource in its current use, often due to scarcity or monopolistic control.

Accrue

The accumulation or increase of something over time, especially payments or benefits.

Changes in Rent

Variations in the lease price for rental properties due to factors like market demand, location, and quality of the property.

Demand and Supply

The basic economic principle that describes the quantities of goods and services that buyers are willing and able to purchase at various prices and the quantities sellers are willing to sell.