A credit balance in the account Allowance to Adjust Long-Term Investments to Market is disclosed in the financial statements as a
A)regular account in the stockholders' equity section of the balance sheet.
B)contra account to Long-Term Investments.
C)note to the financial statements.
D)current asset.

Question

Quizplus · Accepted Answer

A credit balance in the account Allowance to Adjust Long-Term Investments to Market is typically used to offset the original cost of long-term investments on the balance sheet. Therefore, it is a contra account to Long-Term Investments rather than its own regular account or a current asset. It may also be disclosed in the notes to the financial statements, but it is not typically its own separate line item on the balance sheet.

A Credit Balance in the Account Allowance to Adjust Long-Term