Which of the Following Is True Regarding Accounting for Investments

question 94

Multiple Choice

Which of the following is true regarding accounting for investments by state and local governmental units?

• A) Investments in securities accounted for under the equity method are to be reported at fair value.
• B) Realized gains and losses are to be reported separately from unrealized gains and losses in the Statement of Changes in Fiduciary Net Position.
• C) Both of the above.
• D) Neither A nor B above.

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Definitions:

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services. Efficiency is achieved when no additional output can be gained without increasing the amount of inputs.

Collective Action Problem

A situation where individuals in a group fail to achieve a common or collective goal because they prioritize their personal interests.

Logrolling Behavior

A practice in politics where individuals or parties exchange favors for mutual benefit, often seen in legislative voting processes.

Inefficient Policies

Government or organizational policies that do not achieve the intended outcomes effectively or result in wasteful use of resources.