Long-Term Investments Are Usually Held as an Investment of Cash

question 142

True/False

Long-term investments are usually held as an investment of cash for use in current operations.

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Definitions:

Investment

The allocation of resources, typically money, into assets or projects with the expectation of generating income or profit.

Investment Income

Earnings from assets acquired, such as dividends on shares or interest on bonds.

Equity Method

An accounting technique used to record investments in other companies, where the investment is significant but not controlling.

Stock Investments Account

An account used to record the purchases and sales of equity securities, such as shares of stock, that a company holds as investments.