The Valuation Principle of "Fair Value Accounting" Applied to Investments

question 69

Multiple Choice

The valuation principle of "fair value accounting" applied to investments classified as available-for-sale securities:

• A)Affects the current period income statement,but not the balance sheet.
• B)Enhances usefulness of the balance sheet in evaluating the financial position of a business.
• C)Applies to marketable securities and inventories.
• D)Requires a corporation to adjust its capital stock account to reflect current market value of its outstanding capital stock.

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Definitions:

Bootstrapping

A method of financing a startup or new venture by using personal funds or operating revenues rather than seeking external investment.

Competitive Advantages

Unique attributes or capabilities that allow an organization to outperform its competitors.

Raw Start-up

A very early stage startup without a fully developed product, business model, or customer base, typically exploring a market opportunity.

High-growth Company

A business that experiences significantly higher than average rates of growth in revenue or other critical metrics.