Asked by baijun cheng on Jun 29, 2024
Verified
Which of the following is not a true statement about the accounting for debt investments?
A) At acquisition the historical cost principle applies.
B) The cost includes any brokerage fees.
C) Debt investments include investments in government and corporation bonds.
D) The cost includes any accrued interest.
Debt Investments
Financial assets representing money lent to an entity (corporate or governmental) that must be paid back with interest.
Historical Cost
The original monetary value of an asset, as recorded on the balance sheet, without adjustments for inflation or market changes.
Brokerage Fees
Charges imposed by a brokerage firm for facilitating transactions, such as buying or selling securities, for its clients.
- Distinguish between different kinds of investments and their intended uses.
- Absorb the accounting standards and entries necessary for the purchase, interest accrual, and selling of debt investments.
Verified Answer
Learning Objectives
- Distinguish between different kinds of investments and their intended uses.
- Absorb the accounting standards and entries necessary for the purchase, interest accrual, and selling of debt investments.
Related questions
Bay Company Acquires 60 8% 5 Year $1000 Community Bonds ...
On January 1 2017 Brenner Company Purchased at Face Value \(\begin{array}{llr} ...
A Company May Purchase a Noncontrolling Interest in Another Firm ...
Bay Company Acquires 60 8% 5 Year $1000 Community Bonds ...
On January 1 Hamm Company Purchased as an Investment a ...