The Valuation Allowance for Trading Investments account is found on the
A) income statement as other revenue (expense)
B) balance sheet as an adjustment to the asset account
C) balance sheet as an adjustment to stockholders' equity
D) statement of stockholder's equity

Question

Quizplus · Accepted Answer

The Valuation Allowance for Trading Investments account is an adjustment to the asset account valuation of trading investments, which is reported on the balance sheet. It reflects a reduction in the value of the investments held for trading, and is used to adjust the assets of the company to their fair market value. This is a common practice in companies that hold short-term investments, such as stocks and bonds, that are traded on the open market. The allowance is calculated based on market conditions, the liquidity of the assets, and other factors that may impact the value of the investments.

The Valuation Allowance for Trading Investments Account Is Found on the