The valuation of short-term marketable securities on the balance sheet is 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 is approximately equal to the cost of these investments.

Question

Quizplus · Accepted Answer

Short-term marketable securities are often valued close to cost because their high quality and short maturity make their market values relatively stable.

The Valuation of Short-Term Marketable Securities on the Balance Sheet