Which of the Following Is True Regarding the Reporting of Investments

question 106

Multiple Choice

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

• A) Investments, for which a determinable fair value can be obtained, are to be reported at fair value.
• B) Realized and unrealized gains and losses are to be combined in the relevant operating statement for example, the Statement of Changes in Fiduciary Net Position).
• C) Both of the above.
• D) Neither of the above.

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Definitions:

Residual Value

Residual Value is the estimated value that an asset will realize upon its sale at the end of its useful life, crucial for calculating depreciation for assets.

Salvage Value

Salvage value is the estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.

Maintenance Costs

Expenses incurred to keep property, equipment, or software operational and in good working condition.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.