Asked by NURUL ASMIRA JAKIMIN on Jun 29, 2024
Verified
Marketable debt and equity securities that a firm expects to hold as a short-term investment are reported on the balance sheet at
A) current market value.
B) historical cost.
C) amortized current market value.
D) amortized historical cost.
Marketable Debt
Debt securities that are readily available for purchase and sale in the public market.
Equity Securities
Financial instruments representing ownership interest in a company, such as stocks, which provide voting rights and potential dividends.
Short-Term Investment
Financial assets that are expected to be converted into cash or sold within a year.
- Familiarize oneself with the presentation and reporting practices for current and non-current assets on the balance sheet.
- Understand the measurement bases used for asset, liability, and equity reporting.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
A
Explanation :
Marketable debt and equity securities held as short-term investments are reported on the balance sheet at current market value, as per accounting standards. This reporting method reflects the fair value of the securities and allows for better measurement of the company's financial position. Historical cost (B) and amortized historical cost (D) are not appropriate for short-term investments, whereas amortized current market value (C) is not a standard reporting method for these investments.
Learning Objectives
- Familiarize oneself with the presentation and reporting practices for current and non-current assets on the balance sheet.
- Understand the measurement bases used for asset, liability, and equity reporting.