Asked by Gerson Torres on Jul 25, 2024
Verified
Short-term stock investments should be valued on the balance sheet at
A) the lower of cost or fair value.
B) the higher of cost or fair value.
C) cost.
D) fair value.
Short-Term Stock Investments
Investments in publicly traded stocks intended to be held for a short duration, typically less than one year, for the purpose of earning quick profits.
Fair Value
The estimated market price of an asset or liability, reflecting the amount for which it could be exchanged or settled between knowledgeable, willing parties in an arm's length transaction.
Balance Sheet
A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.
- Comprehend the principles of accounting valuation and how short-term investments are represented on the balance sheet.
Verified Answer
Learning Objectives
- Comprehend the principles of accounting valuation and how short-term investments are represented on the balance sheet.
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