Why is it useful for a footnote to the balance sheet to give the cost of investment assets individually?
A)To avoid double taxation when taxes are filed.
B)To permit estimation of the effect of taxation on the gain upon ultimate sale.
C)As investment assets often cannot be turned into cash immediately without penalty.
D)All of the above.
E)None of the above.

Question

Quizplus · Accepted Answer

Giving the cost of investment assets individually in a footnote to the balance sheet permits estimation of the effect of taxation on the gain upon ultimate sale. This information can be useful for tax planning and determining the potential gains or losses on selling these assets. It has nothing to do with avoiding double taxation or penalties for turning investment assets into cash immediately.

Why Is It Useful for a Footnote to the Balance