The Allowance to Adjust Investment to Market account will always have a debit balance.

Question

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The Allowance to Adjust Investment to Market account can have a debit or a credit balance depending on whether the market value of the investment is higher or lower than the original cost. If the market value is higher, the account will have a credit balance, and if the market value is lower, it will have a debit balance. The purpose of this account is to adjust the value of the investment on the balance sheet to reflect its current market value.

The Allowance to Adjust Investment to Market Account Will Always