All of the Following Statements Regarding Equity Securities Are True

question 51

Multiple Choice

All of the following statements regarding equity securities are True except:

• A) Equity securities should be recorded at cost when acquired.
• B) Equity securities are valued at fair value if classified as trading securities.
• C) Equity securities are valued at fair value if classified as significant influence securities.
• D) Equity securities are valued at fair value if classified as available-for-sale securities.
• E) Equity securities classified as available-for-sale record the dividend revenue when received.

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Definitions:

Rent

A periodic payment made for the use of land, a building, or other property.

Insurance

A financial product providing protection against possible financial losses or damages, involving regular payments in exchange for the promise of compensation under certain conditions.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, resulting in cost per unit of output decreasing with increasing scale.

Diseconomies of Scale

The phenomenon where production costs per unit increase as an operation scales up, typically due to inefficiencies or increased complexities.