An investment in common stock acquired during the year at a cost of $45,000 has a market value at year end of $45,771. The adjusting entry requires a debit to Allowance to Adjust Investment to Market for $771.

Question

Quizplus · Accepted Answer

The adjusting entry to adjust the investment to market value requires a debit to the Allowance to Adjust Investment to Market account for the difference between the cost and market value, which in this case is $771. Therefore, the statement is true.

An Investment in Common Stock Acquired During the Year at a Cost