Which one of the following measurement bases applies to investments not subject to equity accounting that are classified as trading securities?
A)Current value
B)Book value
C)Effective rate of interest method
D)Lower-of-cost or market

Question

Quizplus · Accepted Answer

Trading securities are typically held for short-term purposes with the goal of earning short-term profits. Therefore, the most appropriate measurement basis for these investments is their current value (market value) which can readily reflect changes in fair value over time.

Which One of the Following Measurement Bases Applies to Investments