Question

Which one of the following is not a generally accepted accounting principle?

• A. Sales, revenues and incomes should not be anticipated or materially overstated.
• B. There must be proper cut off accounting for inventories and liabilities for costs and expenses.
• C. Non-recurring and extraordinary gains and losses should be recognised in the period they accrue, but should be shown separately from the usual operations.
• D. Long-term investments in securities should ordinarily be carried at market quotations.

Answer 1

Answer: (D)

Long-term investments in securities should ordinarily be carried at market quotations.

A long-term investment is an account on the asset side of a company's balance sheet that represents the company's investments, including stocks, bonds, real estate, and cash. Long-term investments are assets that a company intends to hold for more than a year.

The long-term investment account differs largely from the short-term investment account in that short-term investments will most likely be sold, whereas the long-term investments will not be sold for years and, in some cases, may never be sold.