the valuation of short term marketable securities on the balance sheetIs likely
ID: 2497514 • Letter: T
Question
the valuation of short term marketable securities on the balance sheetIs likely to be for an amount that is approximately equal to the cost of these investments because: A. The market value of short term marketable securities does not fluctuate from cost.B. The high quality and close maturity date of the securities cause their market values to be relatively stable. C. Generally accepted accounting principles require that short term marketable securities be reported at cost.
D. The question statement is false; the valuation of short term marketable securities on the balance sheet is not likely to be for an amount that approximately equal to the coat of these investments. the valuation of short term marketable securities on the balance sheetIs likely to be for an amount that is approximately equal to the cost of these investments because: A. The market value of short term marketable securities does not fluctuate from cost.
B. The high quality and close maturity date of the securities cause their market values to be relatively stable. C. Generally accepted accounting principles require that short term marketable securities be reported at cost.
D. The question statement is false; the valuation of short term marketable securities on the balance sheet is not likely to be for an amount that approximately equal to the coat of these investments. the valuation of short term marketable securities on the balance sheetIs likely to be for an amount that is approximately equal to the cost of these investments because: A. The market value of short term marketable securities does not fluctuate from cost.
B. The high quality and close maturity date of the securities cause their market values to be relatively stable. C. Generally accepted accounting principles require that short term marketable securities be reported at cost.
D. The question statement is false; the valuation of short term marketable securities on the balance sheet is not likely to be for an amount that approximately equal to the coat of these investments.
Explanation / Answer
Short term marketable are investment which will mature within one year. It is valued in Balance sheet at cost. It is due to the provision of ASC 320 in US GAAP. This provision is applicable on investible securities. It includes debt securities as well as stock. It states that valuation will be made at fair value basis only when it has a readily determinable fair value. If it is not available then it is valued at cost. Same principle is applicable when securities are sold or transfered within one year. They are also required to be valued at cost.
Answer: Option C is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.