When more than one security is sold for a single price and the total selling price is not equal to the sum of the market prices,the cash received is allocated between the securities based on:
A)Relative book values.
B)Par values.
C)Relative market values.
D)The earnings per share.

Question

Quizplus · Accepted Answer

The cash received from selling multiple securities for a single price should be allocated based on their relative market values, as this reflects their true worth in the current market. Using book values or par values may not accurately reflect the securities' current values, while earnings per share is not relevant in determining the allocation of proceeds from a sale.

When More Than One Security Is Sold for a Single