Which of the following statements is true in regards to the cost method?
A) Investments for which no current market values exist must be accounted for using this method
B) Trading investments are reported using the cost method
C) Dividends and interest received are recognized in current income
D) The investment is adjusted to fair value at year end

Question

Quizplus · Accepted Answer

Under the cost method, any dividends and interest received are recognized in current income. Investments for which fair value cannot be determined must be accounted for using the cost method. Debt securities that management intends to hold to maturity are also reported using the cost method.

Which of the Following Statements Is True in Regards to the Cost