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发表于 2014-11-29 17:00:36
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21. The following information pertains to Smoke Inc.’s investments in marketable equity
securities, classified as available-for-sale:
At year end, Smoke has a security with a $70,000 cost and a $50,000 fair value. (No
Market Adjustment account exists.)
A marketable equity security costing $50,000, has a $60,000 fair value on December 31.
Smoke believes the recovery from an earlier lower fair value is permanent.
What is the net effect of the above two items on the balances of Smoke’s Market Adjustment
account for available-for-sale marketable equity securities as of December 31?
a. No effect
b. Creates a $10,000 debit balance
c. Creates a $20,000 credit balance
d. Creates a $10,000 credit balance
Smoke believes the recovery from an earlier lower fair value is permanent.
怎么理解?
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